Date: Fri, 21 Nov 2008 18:01

From: Jason Neyers

Subject: Roffey Bros

Dear Andrew:

I would say as a matter of logic consideration must be necessary for any modification of a contractual obligation except perhaps for unilateral abandonment (if such a thing is possible in contract law). Why should the promise of the extra money be binding in Roffey? The promisor only has an obligation to pay X not X plus Y. If consideration isn't needed for Y, then why is it needed for X in the first place? The practical reasons you allude to are arbitrary, and make contract law incoherent, as Cardozo once said:

Some courts have drawn a distinction between the formation of the contract and the regulation of performance. The distinction has been rejected in many jurisdictions … I think we should reject it now … I think it is inadequate to say that oral changes are effective if they are slight, and ineffective if they are important. Such tests are too vague to supply a scientific basis of distinction … The field is one where the law should hold fast to fundamental conceptions of contract and of duty, and follow them with loyalty to logical conclusions.

So I would argue that you are confusing prudence and logic. So I still think that a serious attack on pre-existing duty is an attack on consideration.

The Roman law of contract, in this respect (and others) was not a beacon of coherence, see Hegel's discussion in Philosophy of Right, § 79.

Jason Neyers
Associate Professor of Law &
Cassels Brock LLP Faculty Fellow in Contract Law
Faculty of Law
University of Western Ontario
N6A 3K7
(519) 661-2111 x. 88435

Andrew Tettenborn wrote:

Of course Williams is a conceptual disaster: the argument in the CA doesn't hang together, is transparently specious, and wouldn't get that many marks if it came from one of our students.

The difficulty is, of course, that it's very difficult for anyone – apart perhaps from a participant at a common lawyers' get-together – to say, hand on heart, that they think Williams ought to have lost. No layman would say so; and I suspect any lawyer from France or Germany would be amazed to hear it seriously argued.

On the other hand, is an attack on Williams an attack on consideration? I'd say no. The real problem is that, although the consideration requirement started out as a doctrine about creating obligations (with powerful arguments in its favour), English lawyers have always blithely assumed that it must extend to altering, canceling or modifying obligations (as in Williams, and incidentally as in Foakes). But this certainly isn't true as a matter of logic, and it seems to me that there are good practical reasons for making it easier to modify existing obligations than to create entirely new ones. Once accept this, and Williams and consideration can happily coexist.

It's also worth noting that the Romans realised something like this 2000 years ago. Although they didn't have consideration, they had some pretty strict formal requirements for creation of contractual liability. But for canceling an existing liability? Feel free (says the Roman): all you need to do this is a pactum de non petendo (a.k.a. an entirely informal agreement in any form).

<<<< Previous Message  ~  Index  ~  Next Message >>>>>