Contract Law

Williams v. Roffey Bros. & Nicholls (Contractors) Ltd.

[1991] 1 QB 1

Facts

Roffey Brothers had a building contract to renovate flats.
The main contract contained a penalty clause for delay.
Roffey subcontracted carpentry work to Williams for a fixed price.
Williams later experienced financial difficulty because he had underpriced the work.
He could not continue efficiently at the original price.
Roffey became concerned that:
Williams might stop work;
the project would be delayed;
Roffey would have to find another carpenter;
Roffey might incur the main contract’s delay penalty.
Roffey therefore promised to pay Williams an additional amount for completing the work on time.
Williams continued working but was not paid the full additional amount.
Roffey argued that the promise was unsupported by consideration because Williams was already contractually bound to perform the carpentry work.

Whether performance of an existing contractual duty can amount to consideration for a promise of additional payment.
Whether the promisor’s practical benefit can constitute sufficient consideration.

Traditionally, performance of an existing contractual duty is not fresh consideration.
However, where:
A has a contract with B;
B doubts whether A will complete;
B promises additional payment;
B obtains a practical benefit or avoids a practical disadvantage;
the promise is not obtained by fraud or economic duress; then the practical benefit may amount to sufficient consideration.
Consideration need not be a new legal right if the promisor receives a real commercial benefit.

Williams did not promise work fundamentally different from what he had already agreed to perform.
Under the traditional rule in Stilk v. Myrick, this would suggest no fresh consideration.
However, the Court examined the commercial reality.
Roffey received several practical benefits from promising additional payment:
better prospects of timely completion;
avoidance of the trouble and cost of finding a replacement carpenter;
avoidance of disruption to other trades;
reduced risk of liability under the penalty clause;
a more organised payment system based on completed flats.
These benefits were real and commercially valuable even though Williams’ formal legal duty remained unchanged.
The Court also found no fraud or economic duress.
Williams had not deliberately created the difficulty to force more money from Roffey.
Roffey voluntarily offered the additional payment because it was commercially advantageous.
Therefore, the agreement was not a coerced modification.
The case did not abolish the pre-existing duty rule entirely.
Instead, it recognised that a practical benefit may be sufficient consideration where the renegotiation is genuine and untainted by pressure.
The case is particularly important in modern commercial contracts, where parties often vary agreements to avoid delay, disruption or greater loss.

The Court of Appeal held that Roffey’s promise of additional payment was supported by consideration.
Roffey obtained a practical benefit and avoided significant commercial disadvantages.
Williams was entitled to the additional payment for the work completed.
Use this case for: a practical benefit may constitute consideration for a promise to pay more, provided there is no fraud or economic duress.