Part Payment of Debt and Existing Contractual Duty

Topics: Contract, Contract law, Common law Pages: 5 (1698 words) Published: January 10, 2011
Should the decision in Williams v Roffey Bros. [1990] 2 WLR 1153 be extended to cover cases involving part payment of a debt?

The assignment asks whether or not the rule generated in the case of Williams v Roffey Bros & Nicholls (contractors) Ltd [1991] 1 Q.B. should be applied to all cases involving part – payment of debt. The question also requires the analysis of the law in relation to whether pre-existing contractual duty can amount to good consideration. In order to answer the question fully, it will be necessary to look at two areas of consideration in particular: part payment of a debt and performance of existing contractual duties. Before addressing the two concepts above, a brief overview of the facts of Williams v Roffey Bros. & Nicholls (contractors) Ltd.[1991] 1 Q.B. 1. The plaintiff, a subcontractor, entered into an agreement with the defendants, the contractors holding the main contract, to complete carpentry work in 27 apartments for the agreed price of £20,000. After commencing the work the plaintiff began to suffer financial difficulty, claiming that the contracted amount was too low to function suitably and make a profit. The defendants, anxious to avoid a time penalty clause in the main contract, made an agreement to pay the plaintiff a further amount of £10,300 or £575.00 for each apartment on which the carpentry work had been completed. Approximately seven weeks later, the plaintiff had significantly completed the carpentry work in eight more apartments, yet had only received a payment of £1,500.00 from the defendants. At this stage the plaintiff ceased work on the apartments and subsequently brought a claim against the defendants for the additional sum promised. Amongst the arguments proffered by the defence counsel on appeal, it was asserted that though an additional agreement had been made, the agreement failed for lack of consideration, citing Stilk v. Myrick [1809] 2. Camp 317 as authority; where Chief Justice Ellenborough decided that a pre-existing contractual duty cannot amount to consideration for a new agreement. Williams v. Roffey was decided contrary to what one would assume to be the outcome. Since Williams’ performance seemed to be nothing beyond what he had been originally contracted to do, the decision seemed to contravene the judgement of Stilk v Myrick. The defence cited that the plaintiff’s consideration amounted to no more than he was already contracted to do, and therefore no consideration had moved from the promisee in relation to the new agreement. Prima Facie the facts in relation to the contractual duty appear similar in both instances, the defendants make a promise of extra payment to the plaintiffs, in return for the plaintiffs’ fulfilment of their contractual obligations. So why should the Stilk rule be in-applicable in this event? NEED TO ADD THE DECISION OF THE CASE

Consideration, the “badge of enforceability” has been defined as: “A valuable consideration, in the sense of the law, may consist either in 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.” Upon consideration of the facts and authorities submitted, Glidewell’s summation of the scenario and the presented precedents drew the following conclusion: “Accordingly, ... the present state of the law on this subject can be expressed in the following proposition: (i) if A has entered into a contract with B to do work for, or to supply goods or services to, B in return for payment by B; and (ii) at some stage before A has completely performed his obligations under the contract B has reason to doubt whether A will, or will be able to, complete his side of the bargain; and (iii) B thereupon promises A an additional payment in return for A's promise to perform *16 his contractual obligations on time; and (iv) as a result of giving his promise, B obtains in practice a benefit, or...
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