Sir Pollock and Principles of Contract

In order to address this question properly we must identify the significance this case has on the law and what area of law. The rulings of this case falls under an area of contract law called consideration. Consideration is one of the four elements needed in the formation of a contract, it is defined by Sir Pollock in Principles of Contract and approved by Lord Dunedin as " an act of forbearance by one party, 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." There are various rules of consideration for instance; consideration must move from the promise (the person making the promise) . Consideration must not be past and consideration must be sufficient but need not be adequate , in order for consideration to be sufficient in law it has to be; real, tangible and must have some actual value. For one to truly understand the significance of this case we must know exactly what happens in this case and similar cases surrounding it.

The dispute between the two parties happened after Roffey Bros (the defendants) who were a building firm were contracted to work on a block of 27 flats, they sub-contracted the carpentry work to Williams (the claimant). Roffey Bros had a penalty clause in their contract with their client for late completion so it was in their best interest to finish the work by the deadline; they agreed to pay £20,000 to Williams for the carpentry work. Williams fell behind schedule due to complications and the claim that they could not profitably work at that price so Roffey promised to pay Williams a sum of £10,300 to complete the work on time. When the work was complete Roffey didn't pay up claiming that the new contract was void for lack of consideration on Williams' part because Williams was fulfilling an obligation under the first contract and one of the basic rules of consideration is that it cannot be past. However the court of Appeal held that Williams did provide consideration by completing the work on time and Roffey's promise to pay the sum was in fact enforceable. Prima facie this looks just like Stilk v Myrick [1809] which was bout a team of eleven sailors who agreed to crew a ship from London to the Baltic and back but two deserted the ship and the nine refused to work and asked the captain for a pay-rise at the end the captain gave in but when they got back he refused to pay. The courts found that the promise was enforceable because they were already contractually bound to return the ship back home. Thus, there was no consideration provided on the part of the sailors for the additional wages and we know that past consideration can never amount to consideration. Another case with very similar facts is Harley v Ponsonby [1857] where instead of 2 out of 11 who deserted it was 17 out of 36 and the captain agreed to pay the remaining sailors the deserters wage if they got the ship back home. It was held that this contract was enforceable because the remaining sailors had to take up a more work as the numbers dropped significantly. Williams v Roffey [1991] has more in common with the latter rather than with the former.

The issues that surround the similarities and differences between our given case and the two mentioned cases give rise to a great proportion of the arguments on whether or not it was wrongly decided. There is evidence to support both views. I will go on to discuss the main reasons why people disagree with the verdict which are; was there even intention to create legal intentions, there may have been economic duress, the courts overlooked the rule in Stilk v Myrick, there may have been an element of estoppel which should have resulted in the defendant not having to pay up and why the rule weren't extended in later cases. The majority arguments why it was decided correctly stems from the reasons that oppose this view. The arguments I would propose is that the facts of this case can fit into almost every exception of the basic rule of past-consideration, controversy surrounding the allegation of overlooking Stilk v Myrick, the reasons why it weren't extended in later cases and why there was no duress.

Advocates who oppose the decision made in this case point to a number of reasons why it can be seen as being decided wrongly, the first of which is whether or not the second agreement was intended to have legal obligations. The intention to create legal relations is a cornerstone of all contracts, this has to be shown in order for a contract to be enforceable . The reasoning for the second agreement to come into existence is somewhat doubting on whether or not intention was present, the reason why the second agreement came about was because Williams couldn't make a profit if he worked fast enough and Roffey wanted to avoid the penalty clause. This is a domestic reason like the maintainence of the child in Ward v Byham [1956] although it is argued that it is commercial as the reasoning on Roffey's side is because of a penalty clause in the contract, this is true and it would be counted as commercial if the second agreement was between Roffey and their client because the contract is between both parties of that contract with the clause. Williams isn't privy to the contract with the clause so should be counted as a domestic matter. Secondly, if Williams didn't finish the flats in the first agreement Roffey would've been able to sue him for not fulfilling his end of the agreement but chose not to in case Williams would make an empty promise and not finish the job to save themselves the expenses of being sued for breach, although Mr Cotrell said that the sub-contract price was too low to start with it doesn't matter one of the basic rules of consideration that it must be sufficient and need not be adequate. It doesn't matter if the sub=contract was inadequate too start off with, it is what they agreed upon and £20,000 does still have real value. This shows that there were sufficient benefits on both sides, for Roffey " (1) seeking to ensure that the plaintiff continued work and didn't stop in breach of sub-contract; (2) avoiding the penalty for delay; and (3) avoiding the trouble and expense of engaging other people to complete the carpentry work." For Williams the monetary benefit and not being sued in the case of breach. This would suggest that it is only fair that both parties should provide new consideration since there are new benefits on both sides. In retaliation to this argument it has been said by judges on the case that by Williams doing the work on time he is providing new consideration. This brings us onto the third point