Consideration and promissory estoppel — SQE1 Contract question
A worked single-best-answer question on consideration and promissory estoppel, with why each wrong option is wrong — the way SQE1 traps candidates.
Kestrel Builders Ltd contracted to refurbish offices for Orbit plc, with a clause requiring Kestrel to pay Orbit £3,000 for each day of late completion. Kestrel subcontracted the joinery to Felix for £40,000. Halfway through, Felix told Kestrel that he had underpriced the job and was struggling to pay his workers. Concerned about delay, Kestrel promised to pay Felix an extra £10,000 if he finished on time; Felix made no threat. Felix completed the joinery on time, but Kestrel now refuses to pay the extra £10,000, arguing that Felix only did what he was already obliged to do.
Which of the following best describes whether Felix can recover the extra £10,000?
- AFelix can recover the extra sum, because Kestrel obtained a practical benefit from his completing on time and the promise was not obtained by economic duress or fraud.
- BFelix cannot recover the extra sum, because performance of an existing contractual duty owed to the promisor is never good consideration.
- CFelix can recover the extra sum under promissory estoppel, because he relied on Kestrel's promise.
- DFelix cannot recover the extra sum, because a promise to accept part payment of a debt is not binding without fresh consideration.
- EFelix cannot recover the extra sum, because a variation of a contract is only enforceable if it is made in writing.
Show answer and reasoning
Rule: A promise to pay more for the performance of an existing contractual duty is supported by consideration if the promisor obtains a practical benefit and there is no economic duress or fraud.
- B Stilk v Myrick has been refined by Williams v Roffey: a practical benefit to the promisor can be consideration where there is no duress. (right rule, wrong facts)
- C Promissory estoppel operates as a shield not a sword and cannot found a claim for a new payment (Combe v Combe). (wrong rule)
- D The rule in Foakes v Beer concerns part payment of a debt, not a promise to pay more for the same work. (right rule, wrong facts)
- E There is no general requirement that a contractual variation be in writing; the issue is consideration. (wrong rule)
Source: Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1; Stilk v Myrick (1809) 2 Camp 317