‘In English contract law, the doctrine of consideration has been abolished by the decision in Williams’s v Roffey Bros (1991).’ Critically discuss this statement.
The question at hand requires for in depth analysis on the doctrine of consideration. However, I disagree with the statement because the law on consideration is not abolished rather it is expanded and modified by the principle laid down in the case of Williams v Roffey bros. In order to analyse the statement, we will first define consideration in this essay and then look for the relevant law regarding existing contractual duties.
According to (Currie v MISA), a valuable consideration can be either a right, interest, advantage, or profit for one party or a forbearance, detriment or loss Suffered or undertaken by another. This doctrine simply requires the mutuality in the agreements that is something being exchanged by each side. To make a contract enforceable it must be backed up by consideration. Moreover, for a consideration to be valid certain rules must be followed one of such is performance of existing contractual duty.
Generally, if a party is already bound to perform his existing obligation and he claims for additional consideration then it is not a valid contract as per (Stalk v Myrick) where the crew was given a duty of voyage from London to the Baltic. But, unfortunately two seamen deserted, the captain promised the rest of the crew that he will distribute the money of those two, to the rest of the crew, if they can successfully take the vessel back. When they completed this additional promise and reached back to London, the owners refused to pay on the ground that the sailors were already under a contractual duty to perform this act.
Therefore, it was held that performance of existing contractual duty is not a sufficient consideration to make a fresh promise enforceable. The basis for the decision holds some controversy because it was published in two different ways. The Espinasse's report (also known to be the counsel in the respective case) explained that the decision the court gave was actually because of the reason to prevent extortion in a way to protect the captain's for paying more under duress which was normal back then. Basically, this report meant that
some extra work or benefit is given to or undertaken by the other, promise to pay more will not be binding in courts as was held in the case of North Ocean Shipping. Later in the case of (Hartley v Posonby) courts held that parties have gone beyond their existing duties hence the promise to pay extra for the existing contractual duty was enforceable.
was not sure about the decision made in Stilk v Myrick. But Courts didn’t consider the decision of Stilk v Myrick as wrong. The court will only see the intention of parties rather than practising the same approach as was held in Stilk v Myrick. However, Purchas LJ also criticised the ‘practical benefit’ approach as; "Undermining the strength of the obligation to perform a contract by recognizing that a contracting party can rely upon his own breach to establish consideration". But in the obiter remarks in the case of South Caribbean Trading v Trafigura (2004), the courts decided it same as Stilk v Myrick that the promisee was already under an existing contractual duty to complete his task, due to which no consideration has taken place. However, not following Williams decision here doesn’t mean that it was wrong as Coleman J stated about the decision of Williams as "It has not yet been held by the House of Lords to have been wrongly decided". It has been consistently followed in cases like "Anangel Atlas Compania Naviera SA v Ishikawajima-Harima Heavy Industries Co Ltd No.2 and in Simon Container Machinery Ltd v Emba Machinery AB (1998)". The ‘practical benefit’ approach basically avoids the rigid adherence to the pre-existing duty rule which was none-other criticised as invalid for again making negotiations of the same contract.
In conclusion, it is clear that the law has not been abolished in any way as a result of the introduction of the practical benefit rule in the case of William v. Roffey Bros. However, previously, consideration was usually a direct exchange of something of value between parties. However, the court's decision has expanded the scope by recognising that a promise to perform an existing duty can be acceptable consideration if it provides a practical benefit to the promisor or causes a damage to the promisee. The intention of the courts was to improve fairness and flexibility in contract law by recognising the economic realities of current commercial transactions and preventing unfair consequences.