Refining Consideration: RIP Foakes v Beer?

Those with an interest in English contract law are well aware of the significance of the Court of Appeal’s landmark ruling in Williams v Roffey Bros & Nicholls (Contractors) Ltd . 1 There, the court established the principle that the conferral of a practical benefit could be good consideration in relation to a promise of extra payments for no additional performance. Nevertheless, Williams v Roffey left open the question whether this principle could be extended beyond so-called “pay more” cases, to those instances where there has been a relaxation of the initial obligation to make payment (so-called “pay less” cases). In Re Selectmove Ltd , 2 although Peter Gibson LJ saw “the force of the argument” in favour of such an extension, he was nevertheless emphatic in ruling that it was not possible, as a matter of law, since it “would … leave the principle in Foakes v Beer [ 3 ] without any application”. 4 Indeed, according to his Lordship, if such an extension were to be made, “it must be by the [Supreme Court] or, perhaps even more appropriately, by Parliament after consideration by the Law Commission”. 5 However, in MWB Business Exchange Centres Ltd v Rock Advertising Ltd , 6 a unanimous Court of Appeal felt no such qualms. In a decision that is likely to generate much academic debate in England and across the common law world, the court both cleverly affirmed the general principle in Foakes v Beer , and its troublesome progeny, yet simultaneously outflanked it by extending the principle in Williams v Roffey into new territory. The end result is a tidier picture overall, albeit that this consistency may have been achieved by what some might regard as a judicial sleight of hand. In doing so, the position arrived at by the Court of Appeal encroaches upon much of the ground formerly...