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Home » Williams v Roffey Bros & Nicholls (Contractors) Ltd [1989] EWCA Civ 5

Williams v Roffey Bros & Nicholls (Contractors) Ltd [1989] EWCA Civ 5

Court: Court of Appeal, England and Wales

Citation: Williams v Roffey Bros & Nicholls (Contractors) Ltd [1989] EWCA Civ 5; [1991] 1 QB 1

Jurisdiction: United Kingdom

The case of Williams v Roffey Bros & Nicholls (Contractors) Ltd is a significant English contract law case that modernised the doctrine of consideration. It established that where a party to a contract obtains a practical benefit or avoids a detriment, a promise to pay more for the performance of an existing contractual obligation may be enforceable.

This decision marked a clear shift from the rigid traditional rule seen in Stilk v Myrick and introduced a more pragmatic approach to contract modifications. The judgement has had a profound influence on commercial contract law in the United Kingdom.

Background and Context of Williams v Roffey Bros & Nicholls (Contractors) Ltd

Williams v Roffey Bros & Nicholls (Contractors) Ltd arose from a building contract involving the refurbishment of 27 flats in London. Roffey Bros & Nicholls (Contractors) Ltd had secured a contract with the Shepherds Bush Housing Association Ltd to carry out the refurbishment at Twynholm Mansions, Lillie Road, London SW6. The contract included a penalty clause for late completion, meaning the company would incur financial penalties if they failed to deliver on time.

To carry out the carpentry work, Roffey Bros subcontracted a portion of the project to Mr Lester Williams. The agreed sum for the subcontract was £20,000, which was to be paid in instalments. Williams completed part of the work and received payments totalling £16,200.

However, due to the low pricing, Williams encountered financial difficulties and was at risk of being unable to complete the remainder of the work. Recognising the potential delays and associated penalties, Roffey Bros entered into a new agreement with Williams.

On 9 April 1986, Roffey Bros promised to pay Mr Williams an additional £575 per flat for completing the work on time. This arrangement was intended to ensure timely completion of the project and avoid any financial penalties under the main contract.

Williams subsequently completed eight flats but ceased work when only £1,500 of the agreed additional payments had been made. New carpenters were then hired by Roffey Bros to finish the remaining work. Williams sued Roffey Bros for the unpaid amount under the new agreement.

Legal Issues

The core legal question in Williams v Roffey Bros & Nicholls (Contractors) Ltd was whether a promise to pay extra money for the performance of an existing contractual obligation amounted to good consideration in law. Traditionally, under the rule in Stilk v Myrick (1809), such a promise would not be enforceable because the performing party was not offering anything new beyond what was already contractually required.

Roffey Bros argued that Williams was simply doing what he was already obliged to do under the original contract, and therefore, the promise to pay additional sums lacked consideration and was not legally binding. They contended that no fresh legal benefit had been conferred upon them in return for the extra payment.

High Court Decision

At first instance, Mr Rupert Jackson QC found in favour of Mr Williams. He concluded that there had been a mutual understanding that the original contract price was too low and that the revised payment arrangement was in the interest of both parties.

Williams had completed eight flats under the new agreement and was therefore entitled to the additional £575 per flat, with certain deductions for defective work and partial payment remaining from the original contract.

This judgement recognised the reality of commercial dealings, where contractors may renegotiate terms to reflect practical challenges and the true scope of work. However, the primary question of whether such a variation amounted to enforceable consideration required clarification by a higher court.

Williams v Roffey Bros & Nicholls (Contractors) Ltd Judgement

The Court of Appeal in Williams v Roffey Bros & Nicholls (Contractors) Ltd upheld the decision in favour of Mr Williams. The leading judgement was delivered by Glidewell LJ, with Russell LJ and Purchas LJ concurring.

Glidewell LJ proposed a new framework to determine when a promise to pay more for an existing contractual obligation could be enforceable. He set out the following criteria:

  1. A has a contract with B to do work or supply goods and services.
  2. Before completion, A doubts whether B will, or will be able to, complete the contract.
  3. A promises to pay B extra to ensure completion on time.
  4. A obtains a practical benefit or avoids a disbenefit as a result of giving the promise.
  5. The promise is not given as a result of economic duress or fraud.

If these conditions are met, the Court held that the promise of additional payment can be supported by good consideration, even if no new legal obligation is undertaken by the promisee. In this case, Roffey Bros received the practical benefit of avoiding penalties and avoiding the administrative burden of hiring new contractors. This practical benefit was sufficient to render their promise enforceable.

Glidewell LJ acknowledged that the doctrine of promissory estoppel was not fully developed in the arguments, but suggested that the concept of economic duress now provided a modern check against unfair variations. He noted that while Stilk v Myrick had not been explicitly overruled, it had been refined through judicial interpretation in more recent cases. The principle that a practical benefit could constitute good consideration was presented as a natural progression.

Concurring Opinions

Russell LJ offered his own interpretation in favour of the claimant. He emphasised that courts should be more willing to find the existence of consideration in modern commercial contexts, especially where the bargaining powers of the parties are balanced. He pointed out that Roffey Bros had acknowledged the inadequacy of the original contract price and had shifted to a more formalised payment scheme based on performance per flat.

Although Mr Williams did not undertake to perform any additional work beyond his original duty, the modification of the terms and the structure of payment constituted sufficient consideration in Russell LJ’s view. He encouraged a pragmatic approach that reflected the actual relationship and intentions of the parties.

Purchas LJ agreed with the reasoning of his colleagues and concurred with the outcome.

Conclusion

The ruling in Williams v Roffey Bros & Nicholls (Contractors) Ltd has become a cornerstone of modern contract law in the United Kingdom. By acknowledging practical benefits as a form of consideration, it has allowed greater flexibility in contractual modifications and has brought the doctrine of consideration more in line with commercial practice. The case highlights the courts’ willingness to adapt longstanding legal principles to meet the needs of contemporary transactions, without sacrificing the fundamental requirements of contract formation.

Williams v Roffey Bros & Nicholls (Contractors) Ltd continues to be cited and studied as a key case in the development of consideration and contract variation law. It has influenced academic discussion and judicial reasoning alike, ensuring that its legacy remains firmly embedded in English legal doctrine.