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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.

Consideration and promissory estoppel

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?

  1. 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.
  2. BFelix cannot recover the extra sum, because performance of an existing contractual duty owed to the promisor is never good consideration.
  3. CFelix can recover the extra sum under promissory estoppel, because he relied on Kestrel's promise.
  4. DFelix cannot recover the extra sum, because a promise to accept part payment of a debt is not binding without fresh consideration.
  5. 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
A is the best answer. Under Williams v Roffey Bros, where A promises B extra payment for performing an existing contractual obligation owed to A, A's promise is enforceable if A obtains a practical benefit (here avoiding the delay payments and the need to find a replacement) and the promise was not extracted by economic duress or fraud. Felix made no threat, so the promise is binding.

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

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