Explanation on the Existing Contractual Duty to Supply Goods and Services

The discussion begins with Stilk v Myrick (1809).

In this case, two sailors deserted during a voyage and the master promised the remaining sailors extra payment if they continued the journey. When the master later refused to pay, the sailors sued. The court held that the promise was unenforceable for lack of consideration.

According to the Campbell report, Ellenborough CJ stated that the agreement was void for want of consideration, without needing to rely on public policy. The sailors had already promised to do all they could in emergencies before leaving London, and the desertion of two crew members was treated as such an emergency. As a result, the sailors had provided no fresh consideration.

The general rule emerging from Stilk v Myrick is that performance of an existing contractual duty to supply goods or services does not amount to consideration.

A similar issue arose in Hartley v Ponsonby (1857).

Here, nearly half the crew deserted, and the master promised extra payment to those who continued the voyage. When he refused to pay, the sailors sued. The master relied on Stilk v Myrick, arguing that performance of an existing duty could not amount to consideration.

The court rejected this argument. Because the voyage had become dangerous and the original contractual obligations had become impossible to perform, the original contract was treated as frustrated. A new contract had therefore arisen, supported by fresh consideration.

The decision does not recognise performance of an existing duty as consideration; rather, frustration intervened to create a new contractual framework.

The next major development is Williams v Roffey Bros & Nicholls (Contractors) Ltd (1990).

The subcontractor, Williams, agreed to carry out carpentry work for £20,000. The main contractor later realised that the price had been underestimated and feared that Williams would not complete the work on time, exposing them to a penalty clause under the main contract.

After receiving advice from an independent surveyor, the contractor agreed to pay Williams an additional £10,300. When the contractor refused to pay, Williams sued.

The Court of Appeal held that Williams was entitled to the additional payment. The contractor had obtained a practical benefit: avoiding the penalty clause. The court recognised that although Williams did not confer a legal benefit, the practical benefit was sufficient to constitute consideration.

This raises the question of why Stilk v Myrick was not followed.

Both cases involve a promise to pay more for performance of an existing duty. If judicial precedent applied strictly, Williams v Roffey Bros should have followed Stilk v Myrick. The issue was addressed by Purchas LJ in obiter dicta at page 526 of the report. The distinction rested on public policy.

The relevant public policy is duress.

In Williams v Roffey Bros, there was no duress because the contractor voluntarily offered to pay more. In Stilk v Myrick, duress was present on the master’s side: he was dependent on the sailors to complete the voyage, giving them leverage.

At the time, masters relied heavily on sailors, unlike today, where technological advances reduce such dependency. Purchas LJ emphasised that the sailors in Stilk v Myrick may well have conferred practical benefit, but the court refused to recognise it for public policy reasons.

This leads to the question of how consideration existed in Williams v Roffey Bros.

The court treated the arrangement as involving two contracts: the original £20,000 contract and the additional £10,300 contract. Under this analysis, Williams suffered detriment under the second contract, thereby providing consideration.

In reality, Williams performed the same work under both agreements. Judges therefore created consideration by recognising practical benefit. Glidewell LJ cited Chitty on Contracts (25th edn, 1983) para 173, which states that consideration may be satisfied where the promise confers a benefit on the promisor even if the promisee suffers no detriment. This extract was used to justify recognising practical benefit.

It is not persuasive to argue that Williams should only have performed work worth £20,000 because that was the original price. Williams himself proposed the quotation, so he could not later claim that the price was too low to operate profitably. The decision in Ward v Byham was also cited in Williams v Roffey Bros as supporting authority for recognising practical benefit.

This raises the final issue of the status of Stilk v Myrick after Williams v Roffey Bros.

The latter case distinguished Stilk v Myrick but did not overrule it. Stilk v Myrick therefore remains valid. Williams v Roffey Bros operates as an exception where the promisee goes beyond their existing duty.

The subcontractor was treated as having gone beyond his duty because the judges viewed the case as involving two contracts, with additional obligations under the second.

The principle in Stilk v Myrick remains a cornerstone of contract law, as confirmed by Purchas LJ and authoritative texts such as Chitty on Contracts (25th edn, 1983) vol 1 para 185.

In conclusion, Stilk v Myrick was not overruled by Williams v Roffey Bros. It was distinguished on grounds of public policy, and the doctrine of practical benefit operates only as a narrow exception.