Williams V Roffey Bros and Nicholls (Contractors) Ltd

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All England Law Reports/1990/Volume 1 /Williams v Roffey Bros and Nicholls (Contractors) Ltd - [1990] 1 All ER 512 [1990] 1 All ER 512

Williams v Roffey Bros and Nicholls (Contractors) Ltd
COURT OF APPEAL, CIVIL DIVISION PURCHAS, GLIDEWELL AND RUSSELL LJJ

2, 3, 23 NOVEMBER 1989 Contract - Consideration - Performance of contractual duty - Performance of existing contractual duty - Agreement to pay additional money to ensure performance of existing contractual duty - Whether sufficient consideration for payment of additional sum - Whether promise by plaintiff to fulfil existing contractual duty good consideration - Whether defendant obtaining benefit from payment of additional sum - Whether obtaining of benefit amounting to consideration for payment of additional sum - Whether agreement to pay additional sum enforceable. The defendant building contractors entered into a contract to refurbish a block of 27 flats and sub-contracted the carpentry work in the refurbishment to the plaintiff carpenter for a price of £20,000. It was an implied term of the sub-contract that the plaintiff would receive interim payments related to work completed. After completing the carpentry work on the roof and nine flats, and carrying out preliminary work on the remaining flats, for which work he received interim payments of £16,200, the plaintiff found that he was in financial difficulties because the price was too low and he had failed to supervise his workmen properly. Furthermore, he had by then received over 80% of the sub-contract price but still had far more than 20% of the work to complete. The defendants, who were liable under a penalty clause in the main contract if it was not completed on time, were aware of the plaintiff's difficulties and that the sub-contract had been underpriced. They called a meeting with the plaintiff at which they agreed to pay the plaintiff an extra £10,300 at the rate of £575 per flat on completion to ensure that the plaintiff continued with the work and completed on time. The plaintiff continued work and completed eight further flats while the defendants made one further payment of £1,500. The plaintiff stopped work on the remaining flats and brought an action claiming £10,847. The defendants denied that they were liable and in particular denied that any part of the additional £10,300 could be claimed because the agreement to pay it was unenforceable since it was not supported by any consideration. The judge held that the plaintiff was entitled to eight payments of £575 less a small deduction for defective and incomplete items, together with a reasonable proportion of the amount outstanding under the original contract, making a total, after deduction of the further £1,500 which the plaintiffs had already paid, of £3,500. The defendants appealed. Held - Where one party to a contract agreed, in the absence of economic duress or fraud, to make a payment to the other party to the contract over and above the contract price in order to secure completion of the contract by the other party on time and thereby obtained a benefit, such as the avoidance of a penalty payable to a third party if the contract was not completed on time, the obtaining of that benefit could amount to consideration for the payment of the additional sum. Accordingly, the advantages which from a pragmatic point of view the defendants hoped to obtain by agreeing to make the additional payment of £10,300 to the plaintiff, namely to avoid a penalty under the main contract or having to engage another sub-contractor, amounted to consideration for the extra payment even though the plaintiff was not required to undertake any work additional to that which he had originally undertaken to do. It followed that the plaintiff was entitled to claim the extra payments. The defendants' appeal would therefore be dismissed (see p 21 j to p 522 b d g

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h, p 524 d to h and p 527 d to h, post). Stilk v Myrick (1809) 2 Camp 317 approved....
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