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In Defence of Foakes v. Beer

Published online by Cambridge University Press:  16 January 2009

Janet O'Sullivan
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Extract

This paper aims to defend what many academic commentators regard as indefensible—the rule in Foakes v. Beer.

For almost four hundred years (since Pinnel's Case) English law has been clear: the payment of, or promise to pay, a smaller sum than the amount due does not discharge the debt, since the debtor provides no considerationfor the creditor's promise to waive the balance—there is no “accord and satisfaction”. The House of Lords approved this rule, albeit reluctantly on the part of Lord Blackburn, in Foakes v. Beer.

Type
Shorter Articles
Information
The Cambridge Law Journal , Volume 55 , Issue 2 , July 1996 , pp. 219 - 228
Copyright
Copyright © Cambridge Law Journal and Contributors 1996

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References

1 See e.g., Treitel, The Law of Contract 9th ed., p. 116Google ScholarAdams, and Brownsword, (1990) 53 M.L.R. 536Google ScholarCheshire, Fifoot, & Furmston's, Law of Contract 12th ed., pp. 94–95.Google Scholar

2 (1884) 9 App.Cas. 605.

3 (1602) 5 Co.Rep. 117a.

4 It is not immediately obvious why the common law treats a release of a debt as a "promise"— what is a creditor promising when he says "you can keep the money"? Yet it seems clear that some check is needed on the efficacy of informal releases—a function which, at common law, is performed well enough by the language and concepts of promises and consideration.

5 (1884) 9 App.Cas. 605, 617–20.

6 (1809) 2 Camp. 317; 6 Esp. 129.

7 [1991] 1 Q. B. 1 (hereafter "Roffey"). In Roffey the defendant building contractor contracted to refurbish 27 flats and sub-contracted the carpentry to Williams. After finishing work on nine of the flats, Williams got into financial difficulties because his contract price was "too low" and because he failed to supervise his workmen adequately. The defendant then promised to pay him an extra £575 on each completed flat. Williams completed eight more flats but the defendant paid only £1,500 extra, whereupon Williams ceased work and sued, recovering, in effect, the balance of the extra payments promised on the eight completed flats.

8 [1995] 1 W.L.R. 474.

9 Ibid, at 481.

10 See below.

11 See McKendrick, , Contract Law 2nd ed., p. 78Google Scholar; Coote, "Consideration and Benefit in Fact and in Law" (1990–1991) 3 Journal of Contract Law 23Google ScholarChen-Wishart, "Consideration: Practical Benefit and the Emperor's New Clothes" in Good Faith and Fault in Contract Law (Beatson, and Friedmann, ).Google Scholar

12 Holmes, O.W.The Common Law 1881 p. 298.Google Scholar

13 Purchas, L.J. in Roffey [1991] 1 Q.B. 1 23.Google Scholar

14 E.g., British Westinghouse Co. v. Underground Electric Rys. Co. of London [1912] A.C. 673.

15 E.g., Schhdlerv. Northern Raincoat Co. Ltd. [1960] 1 W.L.R. 1038.

16 White and Carter (Councils) Ltd v. McGregor [1962] A.C. 413, although cf. Treitel op. cit., pp. 916–8.

17 Hadley v.Baxendale (1854) 9 Exch. 341; Victoria Laundry (Windsor) Ltd. v. Newman Industries Ltd. [1949] 2 K.B. 528.

18 Williams Bros. v.Agius (E. T.) Ltd. [1914] A.C. 510.

19 Wadsworth v. Lydall [1981] 1 W.L.R. 598.

20 As does a contractor whose subjective "consumer surplus" will not be recognised in a damages award. See Harris, Ogus and Phillips (1979) 95 L.Q.R. 581 and Ruxley Electronics and Constructions Ltd. v. Forsyth [1995] 3 W.L.R. 118.

21 Halson, (1990) 106 L.Q.R. 183 184.Google Scholar

22 Insolvency Act 1986, ss. 239 and 340.

23 Goff, & Jones, , The Law of Restitution 4th ed., pp. 17 22–26Google Scholar; Birks, An Introduction to the Law of Restitution, p. 109Google ScholarBurrows, The Law of Restitution, p. 10.Google Scholar

24 Notably by Coote in "Consideration and Benefit in Fact and Law", and by Chen-Wishart in "Consideration: Practical Benefit and the Emperor's New Clothes", above note 11.

25 The two reasons given in Roffey for the sub-contractor's financial difficulties; see [1991] 1 Q.B. 1, 6.

26 Atiyah, , "Consideration: A Restatement" in Essays on Contract, pp. 179, 181–2.Google Scholar

27 Unless it is accepted that the mere repetition of a promise to do that which has already been promised is itself sufficient "benefit"—surely an even more absurd proposition, with an obvious risk of an infinity of self-supporting promises.

28 The promisee in Roffey was not awarded the full expectation measure on the additional promise; see Chen-Wishart, above note 11.

29 E.g., Central London Property Trust Ltd. v. High Trees House Ltd. [1947] K.B. 130.

30 SeeRussell, L. J. in Roffey [1991] 1 Q.B. 1 17: "… I would have welcomed the development of argument, if it could have been properly raised in this court, that here was an estoppel…".Google Scholar

31 [1980] A.C. 614.

32 See The Evia Luck (No. 2) [1992] 2 A.C.152 166.Google Scholar

33 E.g.,Atiyah, (1982) 98 L.Q.R. 197; cf. Treitel, The Law of Contract 9th ed., pp. 375–6 citing the test of "coercion of will" without objection.Google Scholar

34 Eg., Kerr, J. in The Siboen and The Sibotre [1976] 1 Lloyd's Rep. 293 335Google Scholar rejecting as "much too wide" counsel's submission that any threat to breach a contract can amount to economic duress; Griffiths L. J. in B & S Contracts and Design Ltd. v. Victor Green Publications Ltd [1984] I.C.R. 419, 425: "The law on economic pressure … is in the course of development and it is clear that many difficult decisions lie ahead for the courts … it is certainly not on every occasion where one of the parties unwillingly agrees to a variation that the law would consider that they had acted by reason of duress"; and Kerr, L.J. [1984] I.C.R. 419, 428Google Scholar: "… a threat to break a contract … can, but by no means always will, constitute duress".

35 Birks, , An Introduction to the Law of Restitution p. 183.Google Scholar