This paper will critically discuss the validity of the doctrine of Consideration, in terms of its result and the reasons advanced by the judges in William v Roffey[1] and how it would seem to permit any variation of a contract.

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This paper will critically discuss the validity of the doctrine of Consideration, ‘in terms of its result and the reasons advanced by the judges in William v Roffey and how it would seem to permit any variation of a contract’. Additionally, it will evaluate how the existence of a clear doctrine of economic duress has affected the doctrine of consideration, taking into account the decision reached in (1) Adam Opel GmbH (2) Renault S.A v MItras Automotive (UK) Limited .

As set out by Lush J in Currie v Misa [1875] “ a valuable consideration, in sense of the law, may consist either of some right, interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility, given, suffered or undertaken by the other.” This was further elaborated by Pollock in Principle of Contract, a concept approved by the House of Lords particularly by Lord Dunedin in Dunlop v Selfridge [1915]  as being “an act of forbearance or the promise thereof is the price for which the promise of the other is bought, and the promise thus given for value is enforceable.” Markedly something must come from one party into the contract and out of the contract to the other party.

Subsequently, consideration is a fundamental part of contract law and is used to distinguish between enforceable and unenforceable contracts. Hence, a promise cannot be binding unless it is contained in a deed, of a gratuitous nature (a gift), or is supported by consideration.

The doctrine of consideration is based on the idea of reciprocity, “ something of value in the eyes of the law must be given for a promise in order to make it enforceable as a contract” (Thomas v Thomas). Conspicuously, the doctrine of consideration is governed by many rules and exceptions, notably, that consideration must be sufficient but need not be adequate as was apparent in Chappell & Co v Nestle Co Ltd, where three chocolate wrappers were found to be sufficient consideration in the eyes of the law regardless to their economic value, further highlighting that the courts are less concerned with the adequacy of consideration but merely its presence. As elucidated by Lord Somervell, “a peppercorn does not cease to be good consideration if the promisee does not like pepper and will throw away the corn.”  Consequently, the value of the chocolate wrappers was irrelevant, yet found to be sufficient consideration.

Additionally, a fresh promise requires fresh consideration; hence as a general rule, performance of an existing contractual duty does not suffice good consideration for a new promise, as was established in Stilk v Myrick (1809), where a ship captain after promising extra payment to his crew members under the condition that they sailed back to shore understaffed, refused to meet the promise on arrival. The court held that, the crewmembers had not provided any consideration for the extra payment as they were doing what they were already contracted to do and had done no more than that.  However, as was apparent in Hartley v Ponsby [1857], where the conditions of an existing contractual obligation have significantly changed, and a party goes beyond their original contractual obligation, valid consideration has been provided. The reason being that where there is a promise of variation of terms to the existing agreement, the performance of an existing contractual obligation will be inadequate, resulting in a new contract. Evidently, the principle in Stilk v Myrick did not apply to Hartley v Ponsby for the simple reason that in Hartley v Ponsby, the terms in the original contract had varied greatly as the crewmembers went beyond their contractual duties, therefore resulting in the new agreement.

A further, exception to performance of existing contractual duties can be found in William v Roffey, where Roffey brothers (the defendants and a company of builders) subcontracted William (plaintiff), to renovate a block of flats. The contract that Roffey had, contained a penalty clause for the incompletion of work on time, and therefore it was to their benefit that the work be completed on time. After completing about 80% of the work, William realised that he was unable to complete the remaining flats unless Roffey furnished further payment due to William’s miscalculation of the initial costs.Roffey after confirmation by their surveyor, agreed to a further payment of £10300 to enable William to complete the work on time and to avoid the penalty clause, which would have been a disadvantage to them. However, after completion of eight more flats, for which Roffey paid a proportion of the original price, William ceased work and sued for the remaining agreed upon amount. Roffey refused to pay, on the grounds that the extra payment from their part lacked consideration from William as he was performing an existing contractual duty. The court of appeal acknowledged that indeed there was an existing contractual duty to complete the flats and consequently William had not provided adequate consideration. However, Roffey, by agreeing to the extra payment had avoided the difficulties that may have arisen with the penalty clause contained in their contract and had thus gained a ‘practical benefit’ by making the extra payments to William, amounting to sufficient consideration from William. The ‘practical benefit’ in this case being the avoidance of the penalty clause. Markedly, the rule in Stilk v Myrick was not applied to William v Roffey, and was in fact distinguished, though Glidewell LJ, highlighted that William v Roffey was a refinement of limitation on the rule of Stilk v Myrick and that it remained good law and was not overruled. Essentially, the decision in William v Roffey does not alter the rules governing consideration at the formation of contracts as it only relates to performance of an existing contractual obligation where there is a variation to the existing contractual duties, so long as there is no economic duress or evidence of fraud.

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Arguably, the most distinguishing factor in the case of William v Roffey in contrast to Stilk v Myrick, is that of ‘factual’ and ‘legal’ benefit or detriment.  It could be argued that the judgment in Roffey Bros was reached purely because the judges felt that Williams had provided consideration due to the ‘practical benefit’ Roffey received from William. Therefore, provided Glidewell’s LJ criteria are met and the promisor receives a practical benefit or detriment, sufficient consideration is provided.  In Stilk v Myrick, it was considered that no sufficient consideration was provided as there was only a legal benefit because the crewmembers ...

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