The Williams case involved a party (B) who engaged another party (A) as sub-contractor to do some carpentry work on a block of flats for the purpose of performing a contract between B and (C). The amount for the carpentry work to be paid by B to A was agreed at £20,000, however soon this amount proved to be too low for A to complete the work to a satisfactory standard and at a profit. As a result, B promised to make further payments to A, who in turn undertook no extra obligation. B made this promise due to a comment by his own surveyor that the amount of £20,000 was too low for A to complete the works to a satisfactory standard and due to the fear that A would not finish the work on time. This would cause B to be penalised under the contract held with C. It was held that B’s promise of extra payments did provide sufficient consideration by the way of “practical Benefits.” The fact that B would benefit from A completing the work on time was seen as sufficient grounds to impose this promise. However it seems that with the introduction of this case, instead of producing a clear direction for similar cases to follow there is still an air of ambiguity due to the fact that the Williams case did not overrule the previous case of Stilk v Myrick, which was decided with a contrary result. In Stilk v Myrick there was a similar case of the shipmaster gaining a ‘practical, or factual benefit’ due to the remaining sailors bringing the ship safely home, however in this case of the 19th Century, it was decided that there was not sufficient consideration due to the fact that the sailors were merely doing what they had already been contracted to do. It may seem from this that the courts are inconsistent in their approach to identifying benefit and detriment, however as mentioned, modern contract law demands more flexibility. The comments of some eminent members of the judiciary help to emphasise this point.
Purchas L.J. stated that the Stilk v Myrick case was a “pillar stone of the law of contract”, however he also mentioned that the case might be decided differently today. Glidewell L.J. said that the decision in the Williams case did not “contravene” but did “refine and limit” the principle of the earlier case of Stilk v Myrick, while Russell L.J. described the decision in the Stilk v Myrick case as a “rigid approach” to the doctrine of consideration which was “no longer necessary or desirable”
The statements made by the judges enable us to come to the very careful conclusion that practical or factual benefit to a party in order to secure the completion of a previous contract will normally amount to sufficient consideration. The prior strict need for legal benefit and detriment are no longer justifiable due to the growing nature of the field of duress, (the need to protect a party from undue pressure), echoing the previous comments of Russell L.J.
One can already see that the suggestion made in the title that the courts simply enforce a promise when they think there is good reason to, is not quite accurate. The courts have acknowledged that the field of contract law is very vast and there are many different types of contractual situation, which need to be dealt with in different ways. This has not only taken place in the shift from the strict requirement of legal benefit and detriment, the aspect of practical benefit emphasised in the Williams case has enabled a link to be created between cases of a two-party nature and with those concerning three parties, highlighting other new interventions to the doctrine of consideration. One can argue that the comment made in the title that the courts ‘simply enforce a promise when they think there is a good reason to’ is suggesting that policy implications are a factor. The comments of Margaret Noble aid in highlighting this view; “In the past, the courts have been quick to find consideration and so uphold contracts even when, one might argue, there was none to be found. Lord Denning, on the contrary, did not resort to finding consideration, as he thinks that any act done at the request of the promissor is good consideration, provided that it does not contravene public policy”
Closely tied with the subject consideration is the doctrine of promissory estoppel.
Contrary to the doctrine of consideration, promissory estoppel disregards the requirement of any benefit or detriment, it focuses upon a reliance based theory. At a first glance this would seem to support the view expressed in the title that the courts simply enforce a promise at their own reasoning, however with some exploration into the doctrine of promissory estoppel, similarities can be drawn between the doctrine and with that of consideration, along with evidence that the courts do not merely enforce a promise because they feel there is a good reason to.
Promissory estoppel was developed and restated by lord Denning in the case of Central London Property Trust Ltd v High Trees House ltd.The facts of the case are as follows; the plaintiffs owned a block of flats in central London, which they rented to the defendants for £2,500 per annum. Due to the outbreak war in 1939, the defendants were unable to find sufficient tenants to rent the flats due to the large evacuation of London at the time. The plaintiffs agreed that due to the unforeseen circumstances the rent could be reduced by half (£1,250), this agreement continued until after the end of the war in 1945. Subsequently the problem of finding tenants was no longer an issue. The plaintiffs then sought to return to the original terms of the agreement and also queried whether they could claim the other half of the rent for the war years, since the promise to accept half the required rent was not supported by any consideration. Lord Denning established that the plaintiffs were entitled to the full rent for the time after the war, since their promise was clearly only meant to last until that point. Denning also made this obiter statement in regard to the principle generally,“A promise intended to be binding, intending to be acted upon, and in fact acted on, is binding so far as its terms properly apply.”
The controversial issue with promissory estoppel is whether it undermines the doctrine of consideration by totally disregarding the traditional requirement of benefit and detriment. Lord Denning himself stated that consideration remained a, “Cardinal necessity of the formation of a contract, but not of its modification or discharge.”
This suggests that promissory estoppel is merely an exception to the general doctrine of consideration and does not seek to uproot the traditional doctrine. This view is supported by cases such as Combe v Combe where it was emphasised that ‘Promissory estoppel is limited to the modification of existing legal relationships rather than to the establishment of new obligations.’
The cases of Evenden v Guilford City FC and Durham Fancy Goods Ltd v Michael Jackson (Fancy Goods) Ltd shed light upon the contrary view that promissory estoppel does in fact undermine the doctrine of consideration due to the fact that promissory estoppel can apply even where there is no existing contract between the parties. The aspect of promissory estoppel that has caused the most indecision is whether promissory estoppel is merely suspensory in its effect or whether it has the capability to extinguish a responsibility. In Hughes v Metropolitan Rly the promissory estoppel was purely suspensory, however in the High Trees case the right of the owners to receive full rent for the war years was extinguished by promissory estoppel. The effect of the promise was understood to only be applicable during the war years, so when it ended the rent automatically resumed its pre-war state, thus the effect being also suspensory. The conclusion to be drawn from this is that it is not accurate to say that promissory estoppel can only be used in a merely suspensory way, it may, as shown, be applied to extinguish certain rights or duties (depending on the circumstances of the contract). This being so, promissory estoppel is not unlike, in this regard, a contractual modification which is supported by consideration. Thus shedding doubt upon the suggestion made in the title that the courts are inconsistent in their approach to benefit and detriment, and illuminating the view that the courts sometimes adopt other means of enforcing promises. This may be due to the fact that benefit and detriment may be irrelevant in the circumstances of the contractual situation, (as in the Williams case) or that another mechanism of contract law may be more suitable in deciding the contractual situation, like promissory estoppel for example.
In conclusion, it is fair to say that the notion implied by the title that ‘the courts simply enforce a promise when they think there is good reason to’ is not accurate and does not consider the vast nature of contract law, not all contractual situations can be dealt with in one particular way due to their increased complexity in this modern age. Nor does the statement consider other procedures the courts use to decide contractual cases, which cannot be dealt with using the classic doctrine of benefit and detriment, such as promissory estoppel and the aspect of ‘practical benefit’ given in the Williams case. It is submitted that the arguments made in the title question are not developed or accurate and do not acknowledge other aspects of contract law which apply, or are closely tied with the doctrine of consideration. The comments in the title hint that the courts use public policy considerations instead of maintaining to the traditional doctrine. This essay has discussed the flaws of the interpretation given in the title question and given the more accurate and plausible cause as to why the courts do not always uphold to the traditional doctrine of benefit and detriment with regards to consideration.
Bibliography
Derek Wheatley QC, ‘The Way Ahead On Law Reform’, (1993), Vol. 90 Law Society’s Gazette, p 31
Margaret Noble, ‘For Your Consideration’ (1991), Vol. 141, New Law Journal, p 1529
Stone, R (2002) The Modern Law Of Contract, Fifth Edition, London, Cavendish Publishing Limited,
Trietel, G.H (2003) The Law Of Contract, Eleventh Edition, London, Sweet and Maxwell (publishers) Limited.
[1960] AC 87; [1959] 2 All ER 701
Noble, M “For your consideration”, (1991), vol. 141, New Law Journal, pg 1529
Stone, R. (2002) The Modern Law of Contract, 5thEdition, Cavendish Publishing, London.
