CONSIDERATION2
•Consideration 2
•‘Sufficient’ Consideration
•Performance of a duty imposed by law
–Collins v Godefroy (1831) 1 B & Ad 950
–Witness required under subpoena to attend court and give evidence
–Promised 6 guineas by deft for doing so
–Deft refused to pay
–Held: as he was already under a legal duty to give the evidence, doing so was not good consideration for the promise to pay him
•Consideration 2
•‘Sufficient’ Consideration
•Performance of a duty imposed by law
•Compare: doing more than the legal duty
–Glassbrook Bros v Glamorgan CC [1925] AC 270
–Owners of a mine asked for police presence during a mine
–Police said that then current regular checks were enough
–Owners insisted on officers being stationed at the mine and agreed to pay extra cost of £2,200
–Owners later refused to pay
–Held: anything beyond what police honestly and reasonably thought necessary was an extra service and amounted to good consideration for the promise to pay
•Consideration 2
•Also: Ward v Byham [1956] 1 WLR 496
–Father of illegitimate child promised to pay the mother £1 per week if:
•The child would be well looked after and happy, and
•Be allowed to decide for herself whether to live with the mother
–Father later stopped the payments and the mother suedHeld: (majority Morris & Parker LJJ); that the promise was enforceable;
–that although the mother was already under a statutory duty to look after the child, the two extra promises were beyond the statutory duty and she had, thus, given consideration
–Denning LJ on different grounds: that even if the woman was doing what she was already bound to do, there was sufficient consideration for the promise;
–that a promise to perform an existing duty, or the performance of it, should be regarded as good consideration because it is a benefit to the person to whom it is given.
•See also Williams v Williams [1957] 1 WLR 148; Denning LJ – that a promise to perform an existing duty is sufficient consideration to support a promise so long as there is nothing in the transaction that is contrary to public policy
•Consideration 2
•Performance of an existing contractual duty
•When existing duty is owed to a 3rd party, its performance is regarded as good consideration; e.g. Shadwell v Shadwell (supra)
•When duty owed to 3rd party already existed
–Traditionally not regarded as good consideration, Jones v Waite (1839) 5 Bing NC 341
–Two more recent cases now indicate that a promise to perform an existing duty owed to a promisor, or its performance, could be good consideration
–Pao On v Lau Yiu Long [1980] AC 614
–The Eurymedon [1975] AC 154
•Consideration 2
•Existing contractual duty and variation of contract terms
•Traditionally, existing contractual duty owed to promisor is not good consideration for subsequent promise and for agreement to change the contract terms
•Stilk v Myrick (1809) 6 Esp 129; (1809) 2 Camp 318
•Consideration 2
•Stilk v Myrick --- The Facts
–Clmt was part of 11-man crew who agreed to sail vessel to the Baltick and back to London
–Two crew members deserted in Cronstadt, Russia
–Captain promised to divide the wages of the two deserters between the remaining 9 if they sailed the vessel back to London
–Captain refused to pay
•Consideration 2
•Stilk v Myrick (Espinasse’s report)
•Held: That clmt could not recover because of a just and proper policy identified in earlier case of Harris v Watson
–That is, that a sailor who was promised extra wages in a moment of danger to the ship was not entitled to claim it
•Thus Espinasse’s report is seen as concluding that the decision in Stilk v Myrick was based on policy grounds
•Consideration 2
•Stilk v Myrick (Campbell’s report)
•Held: that although Harris v Watson was rightly decided, it is doubtful whether the ground of public policy on which the judge proceeded was the ground on which it was decided
•That in Stilk, the agreement is void for lack of consideration as there was no consideration for the promise to pay extra to the sailors who remained with the ship
•That before leaving London, the sailors had undertaken to do all that they could under the emergencies of the voyage; they had sold all their services till the voyage should be completed
•That, therefore, without looking at the policy of the agreement, it is void for want of consideration and clmt could only recover the original contract rate i.e. not including the promised extra wages
•Note: Campbell’s report had a better reputation than Espinasse’s; e.g. followed by Mocatta J in The Atlantic Baron [1979] QB 705 to hold that a promisee who does more than he was contractually entitled to do could enforce promise of extra payment
•Consideration 2
•Significant development – “practical benefit”
•Williams v Roffey Bros etc [1991] 1 QB 1
–Defts agreed to refurbish a block of 27 flats for X
–Contract contained a clause making defts liable to pay X for late completion
–Defts sub-contracted carpentry work to clmt for £20,000 but no formal procedure for payments agreed; ultimately payments were made as the work progressed
–Clmt carried out some of the work (but had not finished) and was paid £16,200; clmt fell into financial difficulties
–Clmt had charged too low for the work but also had not supervised his workmen properly
–Defts called a meeting and agreed to pay clmt £10,300 at £575 per flat (because they wanted to avoid having to pay X for late completion)
–Clmt completed 8 further flats; defts made only one further payment of £1,500; deft stopped work and sued
•Consideration 2
•Williams v Roffey Bros etc (contd.)
•Held: that although clmt was doing no more than he was already legally obliged to do, as the defts had obtained a “practical benefit” from the clmt’s subsequent promise to complete the work, the promise to pay the clmt extra money was enforceable --- in the absence of economic duress
•Consideration 2
•Question: what was the “practical benefit” in Williams v Roffey Bros etc?
–Defts avoiding incurring late completion charges to X?
–Defts’ desire to retain clmt and not to find another sub-contractor? (Russell LJ)
–Replacement of haphazard payment method with more formalised system? (Russell LJ)
•Consideration 2
•Note: that in Williams V Roffey Bros, the judges said that they did not doubt the correctness of Stilk v Myrick
–That a gratuitous promise pure and simple (a contract/promise not made by deed) must still be supported by consideration
–But Russell LJ did say that a rigid approach to consideration as in Stilk is neither necessary nor desirable in present times
•Consideration 2
•‘Sufficient’ Consideration
•Part payment of an Antecedent Debt
–General rule: promise to accept part payment of a debt in full settlement is not regarded as supported by consideration and is not enforceable
–Pinnell’s Case (1602) 5 Co Rep 117a
–Foakes v Beer (1884) 9 App Cas 605
–This generally not changed despite the decision in Williams v Roffey Bros
•Re Selectmove [1995] 1 WLR 474
•Note: earlier payment, payment at different place, change of mode of payment etc; all may constitute good consideration for payment of lesser sum to discharge a larger debt; Pinnel’s Case (supra) – “Accord & Satisfaction”
•‘Sufficient’ Consideration
•Performance of a duty imposed by law
–Collins v Godefroy (1831) 1 B & Ad 950
–Witness required under subpoena to attend court and give evidence
–Promised 6 guineas by deft for doing so
–Deft refused to pay
–Held: as he was already under a legal duty to give the evidence, doing so was not good consideration for the promise to pay him
•Consideration 2
•‘Sufficient’ Consideration
•Performance of a duty imposed by law
•Compare: doing more than the legal duty
–Glassbrook Bros v Glamorgan CC [1925] AC 270
–Owners of a mine asked for police presence during a mine
–Police said that then current regular checks were enough
–Owners insisted on officers being stationed at the mine and agreed to pay extra cost of £2,200
–Owners later refused to pay
–Held: anything beyond what police honestly and reasonably thought necessary was an extra service and amounted to good consideration for the promise to pay
•Consideration 2
•Also: Ward v Byham [1956] 1 WLR 496
–Father of illegitimate child promised to pay the mother £1 per week if:
•The child would be well looked after and happy, and
•Be allowed to decide for herself whether to live with the mother
–Father later stopped the payments and the mother suedHeld: (majority Morris & Parker LJJ); that the promise was enforceable;
–that although the mother was already under a statutory duty to look after the child, the two extra promises were beyond the statutory duty and she had, thus, given consideration
–Denning LJ on different grounds: that even if the woman was doing what she was already bound to do, there was sufficient consideration for the promise;
–that a promise to perform an existing duty, or the performance of it, should be regarded as good consideration because it is a benefit to the person to whom it is given.
•See also Williams v Williams [1957] 1 WLR 148; Denning LJ – that a promise to perform an existing duty is sufficient consideration to support a promise so long as there is nothing in the transaction that is contrary to public policy
•Consideration 2
•Performance of an existing contractual duty
•When existing duty is owed to a 3rd party, its performance is regarded as good consideration; e.g. Shadwell v Shadwell (supra)
•When duty owed to 3rd party already existed
–Traditionally not regarded as good consideration, Jones v Waite (1839) 5 Bing NC 341
–Two more recent cases now indicate that a promise to perform an existing duty owed to a promisor, or its performance, could be good consideration
–Pao On v Lau Yiu Long [1980] AC 614
–The Eurymedon [1975] AC 154
•Consideration 2
•Existing contractual duty and variation of contract terms
•Traditionally, existing contractual duty owed to promisor is not good consideration for subsequent promise and for agreement to change the contract terms
•Stilk v Myrick (1809) 6 Esp 129; (1809) 2 Camp 318
•Consideration 2
•Stilk v Myrick --- The Facts
–Clmt was part of 11-man crew who agreed to sail vessel to the Baltick and back to London
–Two crew members deserted in Cronstadt, Russia
–Captain promised to divide the wages of the two deserters between the remaining 9 if they sailed the vessel back to London
–Captain refused to pay
•Consideration 2
•Stilk v Myrick (Espinasse’s report)
•Held: That clmt could not recover because of a just and proper policy identified in earlier case of Harris v Watson
–That is, that a sailor who was promised extra wages in a moment of danger to the ship was not entitled to claim it
•Thus Espinasse’s report is seen as concluding that the decision in Stilk v Myrick was based on policy grounds
•Consideration 2
•Stilk v Myrick (Campbell’s report)
•Held: that although Harris v Watson was rightly decided, it is doubtful whether the ground of public policy on which the judge proceeded was the ground on which it was decided
•That in Stilk, the agreement is void for lack of consideration as there was no consideration for the promise to pay extra to the sailors who remained with the ship
•That before leaving London, the sailors had undertaken to do all that they could under the emergencies of the voyage; they had sold all their services till the voyage should be completed
•That, therefore, without looking at the policy of the agreement, it is void for want of consideration and clmt could only recover the original contract rate i.e. not including the promised extra wages
•Note: Campbell’s report had a better reputation than Espinasse’s; e.g. followed by Mocatta J in The Atlantic Baron [1979] QB 705 to hold that a promisee who does more than he was contractually entitled to do could enforce promise of extra payment
•Consideration 2
•Significant development – “practical benefit”
•Williams v Roffey Bros etc [1991] 1 QB 1
–Defts agreed to refurbish a block of 27 flats for X
–Contract contained a clause making defts liable to pay X for late completion
–Defts sub-contracted carpentry work to clmt for £20,000 but no formal procedure for payments agreed; ultimately payments were made as the work progressed
–Clmt carried out some of the work (but had not finished) and was paid £16,200; clmt fell into financial difficulties
–Clmt had charged too low for the work but also had not supervised his workmen properly
–Defts called a meeting and agreed to pay clmt £10,300 at £575 per flat (because they wanted to avoid having to pay X for late completion)
–Clmt completed 8 further flats; defts made only one further payment of £1,500; deft stopped work and sued
•Consideration 2
•Williams v Roffey Bros etc (contd.)
•Held: that although clmt was doing no more than he was already legally obliged to do, as the defts had obtained a “practical benefit” from the clmt’s subsequent promise to complete the work, the promise to pay the clmt extra money was enforceable --- in the absence of economic duress
•Consideration 2
•Question: what was the “practical benefit” in Williams v Roffey Bros etc?
–Defts avoiding incurring late completion charges to X?
–Defts’ desire to retain clmt and not to find another sub-contractor? (Russell LJ)
–Replacement of haphazard payment method with more formalised system? (Russell LJ)
•Consideration 2
•Note: that in Williams V Roffey Bros, the judges said that they did not doubt the correctness of Stilk v Myrick
–That a gratuitous promise pure and simple (a contract/promise not made by deed) must still be supported by consideration
–But Russell LJ did say that a rigid approach to consideration as in Stilk is neither necessary nor desirable in present times
•Consideration 2
•‘Sufficient’ Consideration
•Part payment of an Antecedent Debt
–General rule: promise to accept part payment of a debt in full settlement is not regarded as supported by consideration and is not enforceable
–Pinnell’s Case (1602) 5 Co Rep 117a
–Foakes v Beer (1884) 9 App Cas 605
–This generally not changed despite the decision in Williams v Roffey Bros
•Re Selectmove [1995] 1 WLR 474
•Note: earlier payment, payment at different place, change of mode of payment etc; all may constitute good consideration for payment of lesser sum to discharge a larger debt; Pinnel’s Case (supra) – “Accord & Satisfaction”
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