Facts
Roffey Bros were main contractors refurbishing a block of 27 flats for a housing association. They subcontracted the carpentry to Lester Williams for £20,000. The contract between Roffey and the housing association included a penalty clause for late completion.
Partway through, Williams ran into financial difficulty. The price was too low, and he wasn't supervising his workers well. Roffey, worried that he wouldn't finish and that they'd face the penalty clause, promised to pay him an extra £10,300, at £575 for each flat completed.
Williams completed eight more flats but received only a small additional payment. He stopped work and sued for the extra money.
Issue
Was Roffey's promise to pay more enforceable? Williams was only doing what he was already contractually bound to do. Under Stilk v Myrick (1809), performing an existing contractual duty owed to the promisor is not normally good consideration.
Decision
The Court of Appeal (Glidewell, Russell and Purchas LJJ) held that the promise was enforceable. Williams was entitled to the additional payments for the flats he had completed.
Reasoning
Glidewell LJ set out what has become known as the practical benefit test. Where:
- A has entered into a contract with B to do work or supply goods;
- before A has completed, B has reason to doubt whether A will complete;
- B promises A an additional payment for completing on time;
- as a result, B obtains a practical benefit or avoids a disbenefit; and
- B's promise isn't given as a result of economic duress or fraud by A;
then the benefit to B can be good consideration for B's promise.
Roffey gained several practical benefits: avoiding the penalty clause, avoiding the trouble and expense of finding another carpenter, and replacing a haphazard payment arrangement with a more orderly one. There was no suggestion of duress. Indeed, it was Roffey who suggested the extra payment.
The court stressed that it was refining Stilk v Myrick, not overruling it. The principle that a promise to pay more for existing duties needs consideration remains. What changed is how readily consideration can be found.
Why it matters
Williams v Roffey recognises commercial reality: parties often renegotiate during performance, and it's usually in both sides' interests. The case allows those variations to be enforced, while the doctrine of economic duress (as in Atlas Express Ltd v Kafco (Importers and Distributors) Ltd [1989] QB 833) protects against renegotiations extracted by illegitimate pressure.
Its limits are just as important. In Re Selectmove Ltd [1995] 1 WLR 474, the Court of Appeal refused to extend practical benefit to promises to accept less than the full debt, because it was bound by Foakes v Beer (1884) 9 App Cas 605. A debtor who wants to rely on a creditor's promise to accept part payment usually has to turn to promissory estoppel instead (Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130).
How it comes up in exams
Variation problems test whether you can tell these situations apart:
- promise to pay more for existing duties: apply Stilk v Myrick and Williams v Roffey, then check for duress;
- promise to accept less: apply Foakes v Beer and Re Selectmove, then consider promissory estoppel;
- existing duty owed to a third party or a public duty: separate rules apply (Scotson v Pegg (1861); Glasbrook Bros v Glamorgan CC [1925] AC 270).
Frequently asked questions
What was decided in Williams v Roffey Bros?
The Court of Appeal held that a main contractor's promise to pay a subcontractor extra to complete work it was already obliged to do was enforceable, because the main contractor gained practical benefits, including avoiding a penalty for late completion.
What is the practical benefit test?
Glidewell LJ set out a series of steps. Where A has contracted with B, B has reason to doubt A will complete, B promises extra payment, B obtains a practical benefit or avoids a disbenefit, and there's no duress or fraud, the benefit can be good consideration for B's promise.
Did Williams v Roffey overrule Stilk v Myrick?
No. The Court of Appeal said it was refining and limiting the rule in Stilk v Myrick, not overruling it.
Does practical benefit apply to part payment of a debt?
No. In Re Selectmove Ltd [1995] 1 WLR 474, the Court of Appeal held that it was bound by Foakes v Beer (1884), so a promise to accept less than is owed is not supported by a practical benefit. The Supreme Court declined to revisit the point in MWB v Rock Advertising [2018] UKSC 24.