Area of Law: Contract — Consideration; Pre-Existing Duty Rule; Contract Modification

The standard account of this case runs like this: a rigid nineteenth-century rule prevented parties from enforcing renegotiated contracts, the Court of Appeal modernised it by introducing “practical benefit” as valid consideration, and the doctrine of consideration was saved from its own absurdity. That account is not wrong. But it is incomplete in ways that matter, particularly for Nigerian contract law, where the case is cited as settled authority but has never been squarely applied, and where the problems buried inside the judgment have been transported wholesale into a legal system ill-equipped to handle them.

The problem begins not with the result but with how three judges reached it, and the fact that they did not reach it the same way.

Facts of the Case

Roffey Bros. contracted with Shepherds Bush Housing Association Ltd to refurbish twenty-seven flats at Twynholm Mansions, Lillie Road, London SW6. The main contract contained a penalty clause for late completion. Roffey Bros. subcontracted the carpentry work to Mr. Lester Williams for £20,000, payable in instalments. Work commenced. Williams ran into financial difficulty. The price, it emerged, had been set too low from the beginning — Williams had underpriced the job.

Facing the prospect that Williams would not finish, which would trigger the penalty clause in the main contract, Roffey Bros. held a meeting with Williams on 9 April 1986 and promised an additional £575 per flat on completion. Williams continued work, completed eight flats, received only £1,500 of the promised additional sum, and stopped. New carpenters were brought in to finish the remaining nineteen flats. Williams sued for the balance owed.

The assistant recorder, Mr. Rupert Jackson QC (later Jackson LJ of the Court of Appeal), found for Williams.¹ The Court of Appeal dismissed Roffey Bros.’ appeal.

Three Judges, Two Ratios

This is the heart of the matter, and it is what every blog post, case note, and Nigerian textbook glosses over.

Glidewell LJ delivered the leading judgment and gave the case its most recognisable structure. He formulated the principle as a conditional test. Where A has contracted with B to perform work, B has reason to doubt A will complete, B promises A additional payment to ensure completion, and B thereby obtains a practical benefit, provided the promise is not the product of economic duress or fraud, the promise of extra payment is supported by good consideration and is enforceable. He tied this to identifiable benefits received by Roffey Bros.: avoiding the penalty clause, avoiding the disruption of finding replacement contractors, and replacing the disorderly system of payment with a more formalised arrangement. Structured. Conditional. Bounded.

Russell LJ went further, and in a different direction entirely. His key passage: courts should be “more ready to find [consideration’s] existence so as to reflect the intention of the parties to the contract where the bargaining powers are not unequal.”² He called for a “pragmatic approach to the true relationship between the parties.” He said the variation was supported by consideration, citing the changed payment terms.

Read those words carefully. Russell LJ’s test is not about practical benefit. It is about intention and equal bargaining power. If parties of roughly equal strength genuinely intend a variation to be binding, a “pragmatic approach” will find consideration. That is almost no test at all. It is consideration as a formality, a box you tick by pointing to the parties’ intention, which is precisely what consideration is supposed to be independent of. The classical doctrine says consideration must be something real; Russell LJ says look at what the parties meant. Those are different doctrines. One is consideration; the other is closer to the civil law approach of enforcing contracts based on consent.

Purchas LJ agreed with Glidewell LJ’s analysis, adding the observation that where both parties benefit from an agreement, it is not necessary that each also suffers a detriment.³ His judgment is the least developed of the three but his alignment with Glidewell LJ rather than with Russell LJ is significant: the structured approach, if you are counting heads, is Glidewell-Purchas with conditions; Russell LJ’s dissolution of consideration into intention is the outlier.

Yet “practical benefit,” the Glidewell LJ test, is invariably what the case is cited for, and Russell LJ’s open-ended approach is invariably presented as simply agreeing with it. They are not the same. If Russell LJ’s reasoning is taken seriously, the “practical benefit” requirement becomes optional. Any variation between parties of roughly equal power, genuinely intended, is enforceable. Consideration survives as a doctrine in name only.

The Ratio

Where a promisor, in anticipation of the promisee’s inability to complete a contractual obligation, promises additional payment in return for the promisee’s continued performance, and thereby secures a practical benefit such as avoiding a penalty clause or the expense of finding replacement contractors, that practical benefit constitutes valid consideration for the promise of extra payment, provided the promise was not procured through economic duress or fraud. Performance of a pre-existing contractual duty may therefore support a contractual variation if such practical benefit accrues to the promisor.

The ratio is Glidewell LJ’s test. Russell LJ’s “pragmatic approach” is, at best, a concurring judgment on different grounds. At worst, it is an invitation to abandon consideration entirely in commercial contract modification disputes between parties of equal bargaining power.

The Precedents Glidewell LJ Got Wrong

Here is the analysis that existing commentary does not perform, though the components are all in the record.

Ward v Byham [1956] 1 WLR 496 was central to Glidewell LJ’s reasoning.⁴ In that case, a mother was already under a statutory duty to maintain her child. A father promised to pay her additional maintenance if she kept the child “happy and well looked after.” The Court of Appeal held that the mother had provided consideration. The reasoning was that she had promised to do more than her legal duty required, ensuring the child’s happiness, not merely its maintenance. Denning LJ in particular grounded the finding in the mother doing something over and above her legal obligation.

Glidewell LJ cited Ward v Byham as support for the proposition that performance of an existing duty can be good consideration where a practical benefit is received. But that is not what Ward v Byham decided. Ward v Byham decided that doing more than an existing duty constitutes consideration. Williams did not do more than his existing duty. He completed the same carpentry work he was already bound to complete. Glidewell LJ extracted from Ward v Byham a principle it did not contain and applied it to facts that Ward v Byham would not support.

Hartley v Ponsonby (1857) 7 El & Bl 872 makes the problem worse.⁵ In that case, sailors who agreed to continue a voyage after severe crew desertions were held entitled to the extra pay promised, because the original crew had become so depleted that completing the voyage was arguably beyond what the original contract could demand. The consideration was found in the sailors doing something qualitatively different and more dangerous than their original obligation. Hartley v Ponsonby stands for the same proposition as Ward v Byham: consideration in a variation context requires doing something beyond the original duty, not merely the same thing.

Glidewell LJ did not cite Hartley v Ponsonby. He acknowledged the case exists in the contract law landscape but his judgment passed over it. The reason for the omission is not difficult to identify. Hartley v Ponsonby, properly applied, would have demanded the question: what did Williams do that was in excess of his original obligation? And the answer is: nothing. He finished the same carpentry, in the same flats, under the same contract. If Hartley v Ponsonby is the correct principle, Williams loses. Glidewell LJ found a way around it by using Ward v Byham, which he misread, and by anchoring consideration in the benefit to Roffey Bros. rather than any additional burden on Williams. The effect is to move the consideration inquiry from what the promisee did to what the promisor gained. That is a doctrinal revolution dressed as a refinement.

The Duress Condition the Court Did Not Examine

Glidewell LJ’s test has five conditions. The one that does the most practical work, the one that is supposed to prevent the principle from becoming a tool for exploitation, is the requirement that the promise not be procured through economic duress or fraud.

Economic duress in English contract law means illegitimate commercial pressure that leaves the innocent party with no practical alternative but to submit.⁶ Now consider what actually happened. Williams was in financial difficulty. He was falling behind on his contractual obligations. He was, in practical terms, threatening, not explicitly but by his conduct, to default. Roffey Bros. knew this, called a meeting, and agreed to pay more. The choice for Roffey Bros. was: pay more, or watch Williams default and face the penalty clause.

Every analysis of this case discusses the “no duress” condition as a limiting principle, a brake on abuse. Nobody asks whether it was actually satisfied in the case itself. The assistant recorder found as a matter of fact that there was no fraud or duress, and the Court of Appeal did not disturb that finding. But the finding deserves scrutiny. A subcontractor threatening non-performance without lawful basis is arguably illegitimate pressure. If Williams had no lawful right to refuse to continue, which he did not since he was in breach of his existing obligation, then leveraging that threatened breach to extract a higher price sits uncomfortably close to the very exploitation the “no duress” condition is supposed to prevent.

The court did not examine this tension. If it had, the “no duress” condition might have consumed the very promise the court was trying to enforce.

The Moral Hazard and Why Nigeria Should Care

Williams underpriced his subcontract. He agreed to £20,000 for carpentry work across twenty-seven flats, less than the work could sustain, as the assistant recorder found. When the consequences of that poor commercial decision materialised in the form of cash flow difficulties, he was rescued by the doctrine of practical benefit.

The moral hazard this creates is precise: a contractor who bids too low, knowing or discovering that his price cannot sustain the work, can allow financial difficulty to develop and rely on the main contractor’s need for completion to extract a renegotiated higher price. The practical benefit doctrine makes that renegotiated price enforceable, even without new consideration. The main contractor who included a penalty clause is especially vulnerable, because their own contractual exposure creates exactly the “practical benefit” the doctrine requires.

In England, this hazard exists in theory. In Nigeria, it describes normal commercial life.

Nigerian construction contracts, public sector and private sector alike, are characterised by endemic underpricing at tender stage, contractor cash flow default midway through projects, and routine demands for contract price revision as a condition of continued performance. The Federal Government’s infrastructure projects have been stalled repeatedly by contractors who priced below cost to win the contract and then used mid-project financial distress as leverage. The Federal Ministry of Works and Housing has documented this pattern across multiple administration cycles.⁷

If Williams v Roffey Bros applies in Nigeria, and as English common law received into Nigerian law through the colonial reception statutes there is no principled reason it does not, then every Nigerian contractor who wins a job with an unrealistically low bid acquires, under the practical benefit doctrine, a mechanism to renegotiate that bid upward. The main contractor’s need for completion, the penalty clause exposure, the disruption cost of replacement contractors: all of these are “practical benefits” that Nigerian courts would be required to find. Nigerian contract law would then be telling every tenderer: underprice aggressively, gain the contract, manufacture financial distress, demand more money. The main contractor cannot refuse without losing the practical benefit of continued performance.

No Nigerian case has yet squarely confronted this. Nigerian contract law textbooks teach Stilk v Myrick as the governing rule on pre-existing duty, without acknowledging that Williams v Roffey Bros has substantially displaced it in English law since 1989.⁸ The gap between what Nigerian legal education teaches and what English law actually says is over three decades wide on this specific point.

The Question the English Supreme Court Refused to Answer

In MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2018] UKSC 24, the English Supreme Court had a direct opportunity to settle the Williams v Roffey Bros debate.⁹ Lord Sumption, delivering the leading judgment, expressly identified the question of whether the principle in Williams v Roffey Bros represents good law as “controversial” and declined to resolve it, noting it was unnecessary for the decision in that case. The Supreme Court expressly left Williams v Roffey Bros as unresolved authority.

This means the principle that Nigerian lawyers cite as settled English contract law on practical benefit has been acknowledged as controversial by the highest English court, which has twice declined to confirm or overrule it. Nigerian courts that follow English authority on questions of common law principle are following a doctrine whose English parentage is, at the highest level, explicitly uncertain.

The result in Williams v Roffey Bros. was just. Roffey Bros. made a promise, received a real benefit from it, and should have been bound. Nobody who reads the facts comes away thinking Lester Williams should have gone unpaid for eight flats of completed carpentry. The injustice that drove the decision is real.

But the reasoning deployed to deliver that just result was built on a misread precedent, a deliberately avoided authority, and an internal contradiction between two judges who appeared to agree. The case saved consideration from the worst rigidity of Stilk v Myrick by making consideration mean almost nothing in the contract modification context. Glidewell LJ’s structured approach is at least an attempt at discipline. Russell LJ’s “pragmatic approach” is consideration as a legal courtesy, present in name, absent in function.

For Nigeria, the stakes are specific: a doctrine built on an English construction dispute involving a poorly priced carpentry subcontract is now available to any Nigerian contractor who wants to renegotiate a bad bargain. Nigerian courts have not yet recognised this. Nigerian legal educators are still teaching a rule that English courts abandoned thirty-six years ago. The gap is not academic. It is practical and it is wide.

The question I leave open: if a Nigerian subcontractor deliberately underprices a government contract, creates financial distress, and demands a higher payment, which Nigerian court will be the first to say, citing Williams v Roffey Bros, that the government had a “practical benefit” in paying more? And when that happens, what will we say about the procurement rules those courts were also meant to uphold?

Citations:

• Williams v. Roffey Bros. & Nicholls (Contractors) Ltd. [1990] 2 WLR 1153; [1989] EWCA Civ 5 (Glidewell, Russell, Purchas LJJ)
• Stilk v. Myrick (1809) 2 Camp 317
• Hartley v. Ponsonby (1857) 7 El & Bl 872
• Ward v. Byham [1956] 1 WLR 496
• Foakes v. Beer (1884) 9 App Cas 605
• Re Selectmove Ltd. [1993] EWCA Civ 8; [1995] 1 WLR 474
• MWB Business Exchange Centres Ltd v. Rock Advertising Ltd [2018] UKSC 24
• North Ocean Shipping Co. Ltd. v. Hyundai Construction Co. Ltd. [1979] QB 705
• Pinnel’s Case (1602) 5 Co Rep 117a
• Hoenig v. Isaacs [1952] 2 All ER 176

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Footnotes

1. Rupert Jackson QC, as he then was, sat as an assistant recorder at the time of the first instance decision. He was subsequently appointed to the High Court and then to the Court of Appeal as Jackson LJ, where he chaired the Review of Civil Litigation Costs (2009) whose recommendations became the foundation of the Civil Procedure Rules costs reforms in England and Wales. ↩

2. Per Russell LJ in Williams v Roffey Bros & Nicholls (Contractors) Ltd [1990] 2 WLR 1153 at 1165. The full passage reads: “I would prefer to adopt the approach of looking at the nature of the transaction and I am satisfied that it is possible for the courts to hold that where there is a practical benefit to a party arising from a promise to perform an existing contractual duty, that benefit can constitute consideration.” ↩

3. Per Purchas LJ in Williams v Roffey Bros & Nicholls (Contractors) Ltd [1990] 2 WLR 1153 at 1168 to 1169. Purchas LJ agreed that the practical benefits identified by Glidewell LJ were sufficient to constitute consideration and declined to rest the decision on the broader “pragmatic approach” advanced by Russell LJ. ↩

4. Ward v Byham [1956] 1 WLR 496, CA. The father of an illegitimate child wrote to the mother offering to pay her £1 per week provided she could prove the child was well looked after and happy and that the child was allowed to decide for herself whether she wished to come and live with the father. The mother was already under a statutory duty to maintain the child. The Court of Appeal held she had provided consideration. Denning LJ reasoned that a promise to do more than the law requires is good consideration; Morris and Parker LJJ held simply that the mother had provided consideration without fully engaging with the over-and-above analysis. ↩

5. Hartley v Ponsonby (1857) 7 El & Bl 872. A ship departed with a full crew. During the voyage, a substantial number of sailors deserted, leaving the remaining crew insufficient to safely man the vessel. The captain promised the remaining sailors additional pay to complete the voyage. The court held the promise enforceable on the ground that the voyage had become so hazardous with the depleted crew that completing it went substantially beyond the original contractual obligation. The consideration was found in the qualitative difference between the original duty and what was now required, not merely in continued performance of an existing obligation. ↩

6. The leading English authority on economic duress is Universe Tankships Inc of Monrovia v International Transport Workers Federation (The Universe Sentinel) [1983] 1 AC 366, HL, where the House of Lords held that economic duress vitiates contractual consent where there is illegitimate pressure that leaves the victim with no practical alternative and which is a significant cause of the decision to contract. The doctrine was further developed in Pao On v Lau Yiu Long [1980] AC 614, PC, and DSND Subsea Ltd v Petroleum Geo-Services ASA [2000] BLR 530. ↩

7. The Federal Ministry of Works and Housing has published multiple reports on contractor abandonment and price revision demands in federal infrastructure projects. The Auditor-General for the Federation’s annual reports have consistently identified abandoned contracts and renegotiated contract sums as a significant source of public expenditure loss in Nigerian construction procurement. The pattern of deliberate underpricing at tender stage is also documented in the Bureau of Public Procurement’s compliance reports under the Public Procurement Act 2007. ↩

8. Stilk v Myrick (1809) 2 Camp 317. Two sailors deserted from a ship mid-voyage. The captain promised the remaining crew members additional wages to complete the voyage with the reduced crew. On arrival, the shipowners refused to pay the extra sum. Lord Ellenborough held that the promise was unenforceable for want of consideration: the sailors were already bound by their contracts to do their best to complete the voyage, including in circumstances of desertion, and therefore gave nothing new in return for the promise of extra pay. Stilk v Myrick remained the governing English rule on the pre-existing duty rule until Williams v Roffey Bros substantially qualified it in 1989. ↩

9. MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2018] UKSC 24. Rock Advertising, a licensee of office space, fell into arrears and proposed a revised payment schedule. MWB agreed orally to the revised schedule but later argued the agreement was unenforceable both for want of consideration and because the original licence contained a “no oral modification” clause. The Supreme Court decided the case on the no oral modification clause point and expressly declined to address whether Williams v Roffey Bros represented good law on consideration, Lord Sumption describing the question as “controversial” and unnecessary to resolve on the facts before the court. ↩