Essay Example on WILLIAMS v ROFFEY BROS NICHOLLS CONTRACTORS LTD 1991

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PART A CASE SUMMARY of WILLIAMS v ROFFEY BROS NICHOLLS CONTRACTORS LTD 1991 1 Q B 1 1 This case was initially held in the high court whereby the judgment was held in favour of the plaintiff The defendants Roffey Bros Nicholls then appealed on the grounds that an agreement between the parties reached on 9 April 1986 whereby they agreed to pay the plaintiff an additional 10 300 over and above the contract price originally agreed of 20 000 was enforceable by the plaintiff and did not fail for lack of consideration The defendants argued that traditionally performance of an existing contractual duty cannot be consideration for a further promise from the party to whom the existing duty is owed since there was no additional legal benefit or detriment FACTS 2 The plaintiff entered a subcontract with the defendants who held the main building contract to carry out carpentry work in 27 flats for 20 000 The plaintiff realised that the agreed price was too low for him to operate satisfactorily and at a profit


The main contract contained a time penalty clause and the defendants were concerned about the work not being completed on time made an oral agreement to pay the plaintiff an additional sum of 10 300 on which the carpentry work had to be completed Seven weeks later when plaintiff had substantially completed eight more flats the defendants made only one further payment of 1500 The plaintiff then sued the defendants for the additional sum promised ISSUES 3 i Whether substantial completion entitled the plaintiff to payment particularly A whether on the true construction of contract entire performance was a condition precedent to payment and B Whether the official referee was wrong in law in applying the principle of H Dakin Co Ltd v Lee 1916 1 K B 566 and rejecting the defendant s submissions that the plaintiff had failed to perform a condition on the fulfilment of which his right to sue depended ii Whether the agreement was enforceable iii Whether there was sufficient consideration iv Whether the consideration moved from the promisee DECISION 4 The judge held that the agreement for payment of the additional sum was enforceable and did not fail for lack of consideration REASONING FOR DECISION 5 i A Lord denning stated that if the balance could be regarded as retention money then the contractor should have done all of the work correctly without defects or omissions in order to be entitled to the balance Since retention money is usually only 10 or 15 per cent whereas this balance was more than 50 per cent he believed that the balance should not be regarded as retention money but as an ordinary lump sum contract He went on to say that it was substantially performed and the contractor was entitled therefore to the contract price less a deduction for the defects B Lord Romer stated that he believed the referee was right in applying the principle because when a man fully performs his contractual duties and supplies all that he agreed to supply but what he supplies is subject to minor defects that he can be said to have substantially performed his promise it is far more quittable to apply the H Dakin Co Ltd V Lee principle than to deprive him wholly of his contractual rights ii The agreement was enforceable because the promise that was made by the defendants to pay the plaintiff the additional sum of 10 300 in return for the completion of his existing contractual obligations on time resulted in a commercial advantage too the defendants The defendants were able to secure practical benefits because of the completion of the block of flats and also managed to obviate dis benefits by avoiding liability under the time penalty clause In addition to this the defendants did not have to go through the struggle of finding new subcontractors


There was no detriment to the plaintiff but despite this it is not necessary for there to be both benefit and detriment iii There was sufficient consideration found because it was said that a main contractor who agrees too low a price with a subcontractor is acting contrary to his own interests The agreement is in the interests of both parties and due to this it does not fail for consideration iv The defendants argued that the consideration did not move from the promise based on the principle illustrated in Tweedle v Atkinson 1861 1 B S 393 The judge said that his understanding of consideration must move from the promise is that such consideration must be provided by the promisee or arise out of his contractual relationship with the promisor It is consideration provided by somebody else not a party to the contract which does not move from the promise This was the situation in Tweedle v Atkinson 1861 1 B S 393 but it was not the situation in this case as here the benefits to the defendants arose out of their agreement with the plaintiff who was the promisee The judge adopted a passage from Chitty on Contracts 26th ed 1989 p 126 para 183 which said The requirement that consideration must move from the promisee is most generally satisfied where some detriment is suffered by him But the requirement may equally well be satisfied where the promisee confers a benefit on the promisor without in fact suffering any detriment Due to this the judge ruled that there was valid consideration and the appeal was dismissed


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