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Lloyd's Maritime and Commercial Law Quarterly

REFINING CONSIDERATION: RIP FOAKES v BEER?

MWB v Rock

Ardavan Arzandeh* and Harry McVea**

Those with an interest in English contract law are well aware of the significance of the Court of Appeal’s landmark ruling in Williams v Roffey Bros & Nicholls (Contractors) Ltd.1 There, the court established the principle that the conferral of a practical benefit could be good consideration in relation to a promise of extra payments for no additional performance. Nevertheless, Williams v Roffey left open the question whether this principle could be extended beyond so-called “pay more” cases, to those instances where there has been a relaxation of the initial obligation to make payment (so-called “pay less” cases). In Re Selectmove Ltd,2 although Peter Gibson LJ saw “the force of the argument” in favour of such an extension, he was nevertheless emphatic in ruling that it was not possible, as a matter of law, since it “would … leave the principle in Foakes v Beer[3] without any application”.4 Indeed, according to his Lordship, if such an extension were to be made, “it must be by the [Supreme Court] or, perhaps even more appropriately, by Parliament after consideration by the Law Commission”.5
However, in MWB Business Exchange Centres Ltd v Rock Advertising Ltd,6 a unanimous Court of Appeal felt no such qualms. In a decision that is likely to generate much academic debate in England and across the common law world, the court both cleverly affirmed the general principle in Foakes v Beer, and its troublesome progeny, yet simultaneously outflanked it by extending the principle in Williams v Roffey into new territory. The end result is a tidier picture overall, albeit that this consistency may have been achieved by what some might regard as a judicial sleight of hand. In doing so, the position arrived at by the Court of Appeal encroaches upon much of the ground formerly

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