• In the case of Williams v Roffey Bros Nicholls 1991 1 QB 1 it was held that where a party to a contract promises to make additional payments to the other party in order for them to complete their original contractual obligations, that promise is sufficient consideration to be enforceable.

Facts of the Case

  • C entered into a subcontract with D, who held the main building contract, to carry out carpentry work in a block of 27 flats for an agreed price of £20,000.
  • C got into financial difficulty because the agreed price was too low for him to operate satisfactorily and at a profit.
  • The main contract contained a time penalty clause and D, worried lest C did not complete the carpentry work on time, made an oral agreement to pay C an additional sum of £10,300 at the rate of £575 for each flat on which the carpentry work had been completed.
  • Approximately seven weeks later, when C had substantially completed the eight more flats, D had only made one further payment of £1,500 whereupon C ceased work on the flats.
  • C sued D for the additional promised sum.
  • The judge at first instance held that the agreement for payment of the additional sum was enforceable and did not fail for lack of consideration, and gave judgment for C.
  • D appealed.

Issues in Williams v Roffey Bros Nicholls 1991 1 QB 1

  • Could C enforce the additional payments orally promised to him.

Held by Court of Appeal

  • The Appeal was dismissed, and D was liable to pay the additional sums.
  • Promise of payment held to be sufficient consideration.

Purchas LJ

  • Appeal dismissed on the grounds that where a part to a contract promised to make an additional payment in return for the other party’s promise to perform his existing contractual obligations and as a result secured by the promise to make the additional payment was capable of constituting consideration.
  • Provided that the payment was not secured by economic duress or fraud and that D’s promise to pay C the additional sum, in return for C’s promise to perform his existing obligations on time, resulting in a commercial advantage to D and the benefit accruing to D provided sufficient consideration to support D’s promise to pay and therefore be enforceable.
  • “I consider that the modern approach to the question of consideration would be that where there were benefits derived by each party to a contract of variation even though one party did not suffer a detriment this would not be fatal to the establishing of sufficient consideration to support the agreement. If both parties benefit from an agreement it is not necessary that each also suffers a detriment. In my judgment, on the facts as found by the judge, he was entitled to reach the conclusion that consideration existed and in those circumstances I would not disturb that finding. This is sufficient to determine the appeal. The judge found as a fact that the flats were “substantially completed” and that payment was due to the plaintiff in respect of the number of flats substantially completed which left an outstanding amount due from the defendants to the plaintiff in the absence of the payment of which the plaintiff was entitled to remove from the site. For these reasons and for the reasons which have already been given by Glidewell L.J. I would dismiss this appeal” p23 D-F

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