Roffey has contracted to Shepherds Bush Housing Association to renovate 27 flats in London. They subcontracted carpentry to Lester Williams for £20,000 payable in instalments. Williams ran in financial difficulty and needed more money to continue the work. Roffey was going to be liable under a penalty clause for late completion, so they decided that they will make extra payment to the Carpenter. Williams continued with work, but 3500£ was still missing. Roffey contracted new carpenters,
- Can there be sufficient consideration for a pre-existing duty?
Held that Williams provided sufficient consideration, because Roffey received 'practical benefit and was not enforced
Glidewell held Williams had provided good consideration. The test for understanding whether a contract could legitimately be varied was set out as follows:
- A has a contract with B for work
- Before it is done, A has reason to believe B may not be able to complete
- A promises B more to finish on time
- A "obtains in practice a benefit, or obviates a disbenefit" from giving the promise
- There must be no economic duress or fraud
The practical benefit of timely completion, even though a pre-existing duty is performed, constitutes good consideration.
A pre-existing duty to the promissor can be legally sufficient consideration if there is a practical benefit to the promissor.