CONSIDERATION CASES

Question 1

Williams v Roffery Bros FACTS

Answer 1

• Williams, a carpenter, was contracted by Roffery to perform work.
• When Williams realized he could not complete the work on time, Roffery promised to pay him extra money on April 9 to ensure timely completion.

Question 2

Williams v Roffery Bros HELD

Answer 2

• WAS liable to pay extra amount
• Performing an existing contractual obligation can be valid consideration if the other party receives a practical benefit and the new promise isn’t made under duress.
• Roffery’s offer of extra payment was his own idea, so there was no duress.
• Williams completing his work on time benefited Roffery, as hiring someone new would worsen his position.
• Since Roffery initiated the extra payment, there is valid consideration without the defense of duress.

Question 3

Re Selectmove Ltd FACTS

Answer 3

• Inland Revenue filed a petition for a winding-up order against Selectmove for unpaid PAYE tax arrears.
• Selectmove appealed, claiming a tax collector agreed to allow them to pay the arrears in installments rather than face winding up.
• The appeal was based on the argument that there was a variation of the original tax obligation.

Question 4

Re Selectmove Ltd HELD

Answer 4

No consideration = appeal dismissed.
- Selectmove argued that, based on Williams v Roffery, consideration exists if the other party receives a practical benefit, claiming Inland Revenue would benefit from avoiding liquidation.
- The court held that the Williams v Roffery ratio applies only where work or goods have been supplied.
- The ruling emphasized that new consideration is required in this context and stated that the case does not bind them.

Question 5

Gloria Jean’s International Coffee v Daboko FACTS

Answer 5

Refusal to pay franchise fee.

Question 6

Gloria Jean’s International Coffee v Daboko HELD

Answer 6

-There was consideration and contract was varied = Daboko version of agreement is binding.
- Traditional consideration requires that the promisee either benefits the promisor or suffers a detriment at the promisor’s request.
- In cases of variation, no consideration may be necessary if the variation is agreed to voluntarily and without illegitimate pressure.
- The judge noted that it is not for him to conclude that consideration is no longer necessary for variation in New Zealand.
- The decision is bound by the Court of Appeal’s approval of Williams v Roffery Bros, which remains the leading case for consideration in New Zealand.