– Corben v
Whatmusic Holdings Ltd 2003 EWHC 2134 (Ch).
This case distinguished Williams v Roffey Bros. & Nicholls (contractors)
Ltd (1991) 1 QB 1 on the grounds that there was an argument raised on whether
there was ever an agreement and it also appeared there was no consideration for
the alleged agreement. It followed the decision made in Selectmove Ltd, Re
(1995) 1 WLR 474; that even if there was an agreement, it would not amount to
an enforceable contract.
Selectmove Ltd, Re 1995 1 W.L.R. 474; 1995 2 All E.R. 531; 1995 S.T.C.
406; 1994 B.C.C. 349; 66 T.C. 552; Times, January 13, 1994; Independent,
January 17, 1994; CA (Civ Div); 21 December 1993.
The issues raised in this case included was that the was the argument of
whether there was any consideration for the agreement. They distinguished the
decision made in Williams v Roffey Bros. & Nicholls (contractors) Ltd
(1991) 1 QB 1 on the grounds that if the other party gained some form of
benefit there would be good consideration. However the Gibson L.J. held that
this decision only applied to cases where work had been completed or there were
goods which were supplied.
Name 2 cases that have distinguished
this decision and outline the grounds for this distinguishment.
When the courts are faced with a case which appears to be relevant to a
previous decision, there are an option of things they are able to do.
Distinguishing is one of these things, alongside; following, overruling or
reversing. To distinguish, the case must have significantly different facts to
the previous case, so then the judges can then distinguish the two cases and
need not follow the previous one. In this instance in the case of Williams v
Roffey Bros. & Nicholls (contractors) LTD (1991) 1 QB 1; two cases which
have been distinguished are:
In this case the court was able to follow the
previous decision in Williams v Roffey Bros. & Nicholls (contractors) Ltd
(1991) 1 QB 1 as there was a promise to mae an extra payment, to assure the
other party’s promise to complete his existing contractual obligation and the
judge found that oral variation agreement would have a number of beneficial
consequences for the respondent in that it would
recover the arrears and that it would retain the appellant as a licensee so
that the property would not be left empty.
MWB Business Exchange Centres
Ltd v Rock Advertising Ltd 2016 EWCA Civ 553; 2017 Q.B. 604; 2016 3 W.L.R.
1519; 2016 2 Lloyd’s Rep. 391; 2016 L. & T.R. 27; Times, July 22, 2016;
Official Transcript; CA (Civ Div); 21 June 2016
This case followed the previous decision as it was
decided there was consideration provided in the continuance of the venture. It was also provided in the variation of the commercial terms, in
particular the change to the royalty provision
Scomadi Ltd v RA Engineering
Co Ltd 2017 EWHC 2658 (IPEC); Official Transcript;
IPEC; 27 October 2017
A case which followed Williams v Roffey Bros. &
Nicholls (contractors) Ltd (1991) 1 QB 1 include:
What cases have followed this decision?
v Roffey Bros. & Nicholls (contractors) Ltd (1991) 1 QB 1 didn’t overrule
the case of Stilk v Myrick (1809) 2 Camp. 317 which held that a new promise
cannot be enforced without any consideration. Even though it did not overrule
the previous decision, Williams v Roffey Bros. & Nicholls (contractors) Ltd
(1991) 1 QB 1 is still a highly followed case.
Is this case still current law?
The case of Williams v Roffey Bros. & Nicholls (Contractors) Ltd (1991) 1
QB 1, set out a new principle which is known as ‘The Roffey Principle’. This
principle allows it to be possible to avoid restrictive outcomes. An example of
this is the performance of an existing contractual duty owed to the promisor,
when there is a benefit to the promisor which arose from the promise.
The ratio decidendi of
this case was decided that a promise to complete an existing commitment can
amount to a valid consideration. This is if the commitment allows the promisee
to gain a practical benefit. If there was no benefit received, the promise would
therefore not be valid as considferation.
L.J. was able to agree with Glidewell L.J. when concerning the judgment made. He
identified that consideration is a fundamental requirement for a contract,
which was decided by Lord Ellenborough C.J. in the case of Stilk v Myrick 2 Camp.
317. He stated that “In the late 20th century I do
not believe that the rigid approach to the concept of consideration to be found
in Stilk v. Myrick 2 camp. 317 is either necessary
or desirable. Consideration there must still be but, in my judgment, the courts
nowadays should be more ready to find its existence so as to reflect the
intention of the parties to the contract where the bargaining powers are not
unequal and where the finding of consideration reflect the true intention of
the parties.” However, Purchas L.J. believed that the rule laid out in
Stilk v Myrick 2 Camp. 317 is still a valid principle as a contract must be
supported by consideration.
Mr Evans for the defendants relied on the principle of law which is based on
the decision in Stilk v.
Myrick (1809) 2 Camp. 317. This judgment was based on the
lack off consideration. It was held that the plaintiff was under an existing
duty, so there was no consideration for the extra money. This judgment was
decided by Lord Ellenborough C.J. This decision was held as still being good
law by Judge Mocatta in the case of In North
Ocean Shipping Co. Ltd. v. Hyundai Construction Co. Ltd. 1979 Q.B. 705. When Glidewell L.J. looked at the case of Stilk v.
Myrick (1809) 2 Camp. 317 he stated “If it be objected that the
propositions above contravene the principle in Stilk v.
Myrick, 2 Camp. 317 , I answer that in my view they do not;
they refine, and limit the application of that principle, but they leave the
principle unscathed e.g. where B secures no benefit by his promise. It is not
in my view surprising that a principle enunciated in relation to the rigours of
seafaring life during the Napoleonic wars should be subjected during the
succeeding 180 years to a process of refinement and limitation in its
application in the present day. It is therefore my opinion that on his findings
of fact in the present case, the judge was entitled to hold, as he did, that
the defendants’ promise to pay the extra £10,300 was supported by valuable
consideration, and thus constituted an enforceable agreement.”
courts then needed to overcome the second issue of whether there was any
consideration for the defendants’ promise. The relevant facts which the judge
found for this issue included that: (i) The subcontracted priced agreed was too
low to allow the claimant to complete the work satisfactorily while making a
profit, which the defendants’ surveyor agreed. (ii) The defendants (Mr. Roffey)
was persuaded by his surveyor that they should pay a bonus to the plaintiff.
The figure agreed was £10,300. The judge was able to quote evidence that the
main contractor agreed that the original price was too low, as he would be
unable to finish the job without paying more money. This then followed with the
judge’s conclusion which stated: “In my view where the original
subcontract price is too low, and the parties subsequently agree that
additional moneys shall be paid to the subcontractor, this agreement is in the
interests of both parties. This is what happened in the present case, and in my
opinion the agreement of 9 April 1986 does not fail for lack of
Lord Denning stated that “the promise to complete to
the work is therefore, construed as a term of the contract, but not as a
condition… unless the breach goes to the root of the matter, the employer
cannot resist payment of the price. He
must pay it and bring a cross-claim for the defects and omissions, or,
alternatively, set them up in diminution of the price. The measure is the
amount which the work is worth less by reason of the defects and omissions, and
is usually calculated by the cost of making them good… In the present case the
contract provided for ‘net cash, as the work proceeds; the balance on completion.’
If the balance could be regarded as retention money, then it might well be that
the contractor ought to have done all the work correctly, without defects or
omissions, in order to be entitled to the balance. But I do not think the
balance should be regarded as retention money. Retention money is usually only
10 per cent., or 15 per cent., whereas this balance was more than 50 per cent.
I think this contract should be regarded as an ordinary lump sum contract. It
was substantially performed. The contractor is entitled, therefore, to the
contract price, less a deduction for the defects.”
looking at the first issue of whether substantial completion entitles the
plaintiff of payment, the judge does not explain why he believes that substantial
completion entitled the plaintiff to the payment. However; to support this
view, Mr Makey for the plaintiff, looks at the previous decision held in the
case of Hoenig v Isaacs (1952) 2 ALL ER 176. In this case the court of appeal
held that the plaintiff was entitled to the payment, less only a deduction for
the costs for the makings.
REASONING FOR DECISION:
In this case the courts were able to dismiss the appeal as the consideration
ensure the right amount of money was received by the plaintiff the Glidewell
L.J. calculated that they were owed £4,600 for the eight other flats they
substantially completed work on at the price of £575 per flat. Also, they were
entitled to a reasonable sum of the original contracted £2,200. The judge was
also able to decide to add further sums together the plaintiff was entitled to
further payments of £5,000 compared to the £1,000 to which he had received.
Therefore, meaning the defendants breached the contract, entitling the
plaintiff to terminate their work.
In this case the courts (Glidewell L.J.) were able to dismiss the appeal as it
was proved there was consideration provided. It was held that the consideration
which was provided by the plaintiff, discussing a benefit on the defendant by
helping them avoid a penalty. Meaning the defendant was liable to make the
extra payments which were promised.
issues in the case of Williams v Roffey Bros. & Nicholls (contractors) LTD
(1991) 1 QB 1 are:
– Whether there was consideration for the defendants’ promise to pay an
additional price at the rate of £575 per completed flat?
– Whether there was substantial completion entitle the plaintiff to the payment?
plaintiff originally sued for the sum of £32,708.70 on 10th March 1987,
this claim was then reduced to £10,847,07 a year later on 3rd March
plaintiff was hired to carry out the carpentry work on 27 of the flats which
belonged to a housing corporation (Shepherds Bush Housing Association Ltd). Shepherds
Bush Housing Association Ltd contracted Roffey Bros. to refurbish the flats. At
the start of the contract the plaintiff was engaged in three different
subcontracts, but were all replaced by a subcontract in writing. The agreed
price of work was £20,000, however the claimant realised this sum was too low
after six months commencing the work as the plaintiff got into financial
difficulties. This then meant he would be unable to finish the work to a
satisfactory rate and at a price while working at the original price agreed.
The defendant also agreed the price was low so agreed to pay a further £575 per
flat which was completed making a sum of £10,300 for all the flats. After a
further seven weeks of work the plaintiff had completed an additional eight
flats but had only received a further payment of £1,500. The claimant was
unable to continue the work on the flats until he received the correct amount
of money, leaving the defendants to engage other carpenters to complete the
work. The plaintiff sued Roffey Bros. & Nicholls (Contractors) for the
further sum of money which was promised. The judge was able to decide that the
additional sum of money was enforceable and held that it did not fail for the
lack of consideration.
The case of Williams v
Roffey Bros. & Nicholls (Contractors) LTD (1991) 1 QB 1 is a case based on
consideration. It identifies that consideration is constituted by a factual
benefit to the promisor which arose from an alternative promise. The Plaintiff
is a carpenter (Williams) and the defendants are building contractors (Roffey
Bros. & Nicholls LTD). They both entered a contract with Shepherds Bush
Housing Association Ltd. The defendants were the main contractors for the work.
The contract was to refurbish a block of flat