Williams v Roffey Bros.
Basically, I'm having a slight problem understanding part of the jugdment in Roffey Bros. I understand that the court held that timely completion of the work was adequate consideration for the second agreement between the parties because Roffey Bros. conferred a "practical benefit". I also understand that the courts reiterate in their jugdment that their decision was not overuling the judgment in Stilk v Myrick. But what distinguishes the facts of Roffey Bros against Silk. Surely the defendant in Silk gained a 'practical benefit' by having the ship return to England. Is there something in the facts of Roffey Bros. which I am missing or do one of the judges mention something in their speeches which states when a practical benefit can and cannot amount to adequate consideration (cos in all honesty I couldn't be ****ed to read all of the speeces from my textbook).
Thanks.
Thanks.
Original post by Tha_Black_Shinobi
Basically, I'm having a slight problem understanding part of the jugdment in Roffey Bros. I understand that the court held that timely completion of the work was adequate consideration for the second agreement between the parties because Roffey Bros. conferred a "practical benefit". I also understand that the courts reiterate in their jugdment that their decision was not overuling the judgment in Stilk v Myrick. But what distinguishes the facts of Roffey Bros against Silk. Surely the defendant in Silk gained a 'practical benefit' by having the ship return to England. Is there something in the facts of Roffey Bros. which I am missing or do one of the judges mention something in their speeches which states when a practical benefit can and cannot amount to adequate consideration (cos in all honesty I couldn't be ****ed to read all of the speeces from my textbook).
Thanks.
Thanks.
I agree they're difficult to reconcile. One thing to bear in mind is that there are two reports of Stilk. Espinasse's, which is rarely considered now, deals with duress/public policy arguments. The sailors effectively had the captain over a barrel. The other, Campbell's (the one considered in Williams) is based on a consideration argument.
It's important in Williams v Roffey that promisee , not the promissor, offered to pay more. Glidewell LJ noted that estoppel could have been run as an argument, and indeed that he would have welcomed it--though this is not the ratio, estoppel didn't exist when Stilk was decided. You should actually look at Arden LJ's speech, though--there's a section (don't remember the paragraph number) where she lays out a numbered test for whether or not an increasing bargain is valid.
My gloss (without responsibility) is as follows.
A practical benefit will exist, and therefore be good consideration for an increasing pact, where:
1.
A is providing services to B under a contract
2.
B is uncertain whether A will be able to fulfill the contract
3.
B promises additional payment to A for finishing the work on time
4.
As a result of the promise, B obtains a benefit or avoids a detriment
5.
B's promise is not the result of the defendant's economic duress or fraud
Original post by jjarvis
Espinasse's, which is rarely considered now,
The judges refused to have regard to Espinasse or any other ass.
Original post by nulli tertius
The judges refused to have regard to Espinasse or any other ass.
I got a nice little chuckle out of this one... Tempted to make reference to certain members of the judiciary (with the greatest possible respect, of course), but probably best not to.
Ha ye. That's not a bad legal pun as they go.
Jjarvis- it was Russell LJ who thought estoppel could have been run as an argument- but you're right to say it was obiter sadly.
And Arden LJ- I'm a bit confused- are you talking about the Collier case? You'll just have to clarify for me.
The issue of when something constitutes a factual benefit is very (academically) controversial. Here's my take on it, from my dissertation, it's not the most original bit of it by any means- but hopefully it will clarify the issue for you. As you can see, I am not altogether happy about the state of the law post Roffey.
(iii.) Roffey; A Flawed Judgment?
Roffey is arguably the most notorious “exception” to Stilk. The facts were that the plaintiffs agreed to carry out building works for the defendants at a fixed price. It became apparent the plaintiffs would become insolvent unless supplied with more money. Moreover, if the work was incomplete by a deadline, then the defendants were liable for delay penalties. Consequently the parties mutually agreed a higher sum for the completion of the works. Naturally the defendants relied on Stilk to suggest the revised agreement was unenforceable. However, in a controversial decision the Court of Appeal found that consideration was sufficient if “factual and practical” benefits flowed from the bargain.
Generally the judgments were reasonably well-received by academia and it is suggested that the correct result was generated. That said, although Roffey was clearly well-intentioned it has caused uncertainty. The problems centre on the definition of “factual and practical” benefit. In coming to their decision, the Court cumulatively suggested that four “practical benefits” were material: (1) the evasion of a breach of contract by the plaintiffs, (2) the fact that no substitute performer was required by the defendants, (3) the avoidance of the penalty clause and (4), the replacement of “a haphazard method of payment…by a more formalised system.” Whilst the use of these factors appears reasonable on the particular facts of Roffey, it is difficult to envisage how the judgment could be consistently applied. For instance, the first two criteria necessarily pertain to all contractual relations. Thus, if they were, by themselves, able to constitute good consideration, this would effectively vitiate the need for the doctrine entirely; a result the judges clearly attempted to avoid. Conversely, the latter two requirements were peculiar to Roffey and would not necessarily provide concrete assistance in similar cases. In reality, it is submitted that the Court felt it inequitable for the defendants to escape the additional payment they had promised and resorted to deliberately ambiguous language in order to arrive at a just conclusion. Nevertheless, the problems with this lack of clarity are highlighted by Colman J’s subsequent scathing treatment of the case in South Caribbean Trading Ltd v. Trafigura Beheer BV.
As such, precise guidance as to the exact constitution of “factual and practical benefits” should have been given. That said, given the historical background of Stilk, there should have been no qualms about simply rejecting Lord Ellenborough’s dicta (or at least the conventional interpretation of them). The law, it is maintained, would have been much clarified if the Court had grasped the opportunity to restate the law completely and rejected the notion that pre-exiting duties could not constitute good consideration. This truly would have created a law reflecting modern commercial realities.
Jjarvis- it was Russell LJ who thought estoppel could have been run as an argument- but you're right to say it was obiter sadly.
And Arden LJ- I'm a bit confused- are you talking about the Collier case? You'll just have to clarify for me.
The issue of when something constitutes a factual benefit is very (academically) controversial. Here's my take on it, from my dissertation, it's not the most original bit of it by any means- but hopefully it will clarify the issue for you. As you can see, I am not altogether happy about the state of the law post Roffey.
(iii.) Roffey; A Flawed Judgment?
Roffey is arguably the most notorious “exception” to Stilk. The facts were that the plaintiffs agreed to carry out building works for the defendants at a fixed price. It became apparent the plaintiffs would become insolvent unless supplied with more money. Moreover, if the work was incomplete by a deadline, then the defendants were liable for delay penalties. Consequently the parties mutually agreed a higher sum for the completion of the works. Naturally the defendants relied on Stilk to suggest the revised agreement was unenforceable. However, in a controversial decision the Court of Appeal found that consideration was sufficient if “factual and practical” benefits flowed from the bargain.
Generally the judgments were reasonably well-received by academia and it is suggested that the correct result was generated. That said, although Roffey was clearly well-intentioned it has caused uncertainty. The problems centre on the definition of “factual and practical” benefit. In coming to their decision, the Court cumulatively suggested that four “practical benefits” were material: (1) the evasion of a breach of contract by the plaintiffs, (2) the fact that no substitute performer was required by the defendants, (3) the avoidance of the penalty clause and (4), the replacement of “a haphazard method of payment…by a more formalised system.” Whilst the use of these factors appears reasonable on the particular facts of Roffey, it is difficult to envisage how the judgment could be consistently applied. For instance, the first two criteria necessarily pertain to all contractual relations. Thus, if they were, by themselves, able to constitute good consideration, this would effectively vitiate the need for the doctrine entirely; a result the judges clearly attempted to avoid. Conversely, the latter two requirements were peculiar to Roffey and would not necessarily provide concrete assistance in similar cases. In reality, it is submitted that the Court felt it inequitable for the defendants to escape the additional payment they had promised and resorted to deliberately ambiguous language in order to arrive at a just conclusion. Nevertheless, the problems with this lack of clarity are highlighted by Colman J’s subsequent scathing treatment of the case in South Caribbean Trading Ltd v. Trafigura Beheer BV.
As such, precise guidance as to the exact constitution of “factual and practical benefits” should have been given. That said, given the historical background of Stilk, there should have been no qualms about simply rejecting Lord Ellenborough’s dicta (or at least the conventional interpretation of them). The law, it is maintained, would have been much clarified if the Court had grasped the opportunity to restate the law completely and rejected the notion that pre-exiting duties could not constitute good consideration. This truly would have created a law reflecting modern commercial realities.
Original post by jjarvis
I got a nice little chuckle out of this one... Tempted to make reference to certain members of the judiciary (with the greatest possible respect, of course), but probably best not to.
I should perhaps say that it wasn't an original pun. It was first made by Mr Justice Maule, a 19th century judge, as Espinasse was one of the worst of the old law reporters
In addition, you need to think carefully about what actually constitutes a practical benefit. Most people don't think about this, but if you don't think about it very carefully I don't think its possible to answer problems well or understand the case-law properly. In the WvR judgments a good 7 PBs are listed, though it isn't clear whether these are individually sufficient or whether they are cumulative. In Stilk, the only obvious benefit is that the sailors did what they were contractually obliged to do. More was present on the facts of WvR.
My take on Williams and Roffey is the "practical benefit" was received by both parties... They both received a practical benefit from the second agreement. The contractor stayed solvent and the flat owners got their property finished on time.
Plus it was good business, I don't think consideration takes this point into account... at least not in this situation. Though the contractor was paid to do a job what is to stop the person paying for the job to "sweeten the deal" of his own volition... It could be argued that in Stilk the sailors had the captain "over a barrel". In Roffey the flat owner simply renegotiated his terms which the contractor agreed with.
Plus it was good business, I don't think consideration takes this point into account... at least not in this situation. Though the contractor was paid to do a job what is to stop the person paying for the job to "sweeten the deal" of his own volition... It could be argued that in Stilk the sailors had the captain "over a barrel". In Roffey the flat owner simply renegotiated his terms which the contractor agreed with.
Original post by jjarvis
I agree they're difficult to reconcile. One thing to bear in mind is that there are two reports of Stilk. Espinasse's, which is rarely considered now, deals with duress/public policy arguments. The sailors effectively had the captain over a barrel. The other, Campbell's (the one considered in Williams) is based on a consideration argument.
It's important in Williams v Roffey that promisee , not the promissor, offered to pay more. Glidewell LJ noted that estoppel could have been run as an argument, and indeed that he would have welcomed it--though this is not the ratio, estoppel didn't exist when Stilk was decided. You should actually look at Arden LJ's speech, though--there's a section (don't remember the paragraph number) where she lays out a numbered test for whether or not an increasing bargain is valid.
My gloss (without responsibility) is as follows.
A practical benefit will exist, and therefore be good consideration for an increasing pact, where:
It's important in Williams v Roffey that promisee , not the promissor, offered to pay more. Glidewell LJ noted that estoppel could have been run as an argument, and indeed that he would have welcomed it--though this is not the ratio, estoppel didn't exist when Stilk was decided. You should actually look at Arden LJ's speech, though--there's a section (don't remember the paragraph number) where she lays out a numbered test for whether or not an increasing bargain is valid.
My gloss (without responsibility) is as follows.
A practical benefit will exist, and therefore be good consideration for an increasing pact, where:
1.
A is providing services to B under a contract
2.
B is uncertain whether A will be able to fulfill the contract
3.
B promises additional payment to A for finishing the work on time
4.
As a result of the promise, B obtains a benefit or avoids a detriment
5.
B's promise is not the result of the defendant's economic duress or fraud
Mindy Chen-Whishart has given an interesting interpretation of Williams v Roffey (Bird in the Hand: Consideration and Contract Modification?). She is basically arguing that besides the bilateral contract, there was a collateral unilateral contract to pay more which prevailed over the terms of the original contract.
Original post by Qoph
Mindy Chen-Whishart has given an interesting interpretation of Williams v Roffey (Bird in the Hand: Consideration and Contract Modification?). She is basically arguing that besides the bilateral contract, there was a collateral unilateral contract to pay more which prevailed over the terms of the original contract.
Sorry this is going back a bit in time now - have come across this thread whilst researching my own WvR essay! That's an interesting point but I'm not really sure what it means.
Would you mind explaining?Original post by Rascacielos
Sorry this is going back a bit in time now - have come across this thread whilst researching my own WvR essay! That's an interesting point but I'm not really sure what it means. Would you mind explaining?
Would you mind explaining?Well, we assume that Roffey Bros made a collateral unilateral contract to pay more. This contract would have prevailed over any terms of the bilateral contract. Consideration is provided by actual performance. If the promisee fails to render the stipulated performance, then the original contract retains full force. This interpretation is not consistent with the language used by the Court of Appeal but make sense.
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