These exercises accompany Chapter 1: Guidance on Reading Cases. Refer to the guidance section of this site for advice on answering the questions.

Exercise 1

Williams v Roffey Brothers and Nicholls (Contractors) Ltd [1991] 1 QB 1 (CA).

Read this case and attempt to answer the questions set out below before you consider the extracts and discussion of this case at pages 106-10, 114-16, and 142-4 of Casebook on Contract Law 15th edn. You might bear in mind the broader policy considerations favouring enforcement of alteration promises and holding a person to their word.

(a) Identify the arguments put on behalf of the plaintiff to support the enforceability of the alteration promise. What difficulty did counsel for the plaintiff face in establishing the argument that the promise was supported by consideration?

(b) Why was there no argument based on promissory estoppel? What, if anything, did each member of the Court of Appeal have to say concerning the scope of that doctrine and its application to facts such as these?

(c) What did the Court of Appeal decide in relation to consideration to support the promise and what did it decide in relation to the defendants’ argument that, if there was a binding promise, the terms were that payment was to be on complete performance of the carpentry work for each flat and this had not occurred when the plaintiff left the site?

(d) On what basis did the Court of Appeal justify not applying Stilk v Myrick (see Casebook on Contract Law 15th edn., at page 103 et seq)?

(e) On what basis was it argued that the principles in Williams v Roffey do not contravene the principle in Stilk v Myrick?

(f) Consider the nature of the consideration which the Court of Appeal held supported the defendants’ promise. What did the Court of Appeal decide constituted the factual benefit? How is this consideration generated and how did the Court of Appeal purport to avoid the potential technical difficulties associated with this?

(g) Can it be argued that the Court of Appeal in Roffey failed to address adequately ‘the long-standing rule that consideration...must move from the promisee’? (See obiter comments of Colman J in South Caribbean Trading Trafalgar Beheer BV [2004] EWHC 2676 (Comm), [2005] 1 Lloyd’s Rep 128 at [108] (page 110 of Casebook on Contract Law 15th edn.) and discussion in Textbook on Contract Law 15th edn. at 43.4.4.)

Exercise 2

Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2002] EWCA Civ 1407, [2003] QB 679.

This case provides an example of a decision of the Court of Appeal reported since the introduction of neutral citation and paragraph numbering for judgments. It is a single judgment on behalf of the court, given by Lord Phillips MR, and the judgment addresses the question whether a mistaken assumption on which both parties contracted was sufficiently fundamental to render the contract void at common law and, if not, whether it was nevertheless possible to rescind such a contract in equity (i.e., set it aside on terms). However, the judgment is complicated because it contains a detailed examination of the context, the applicable legal principles governing common mistake, and the principles’ historical development by means of detailed examination of existing case authorities.

Read the case and then attempt to answer the questions set out below. Try to do this before checking your answers against the references given to pages in Chapter 8 of Casebook on Contract Law 15th edn., where the relevant parts of the judgment are extracted and discussed.

(a) What happened on the facts and what did each party claim? [See pages 401-2]

(b) What did Lord Phillips say concerning the contractual allocation of the risk of impossibility? What effect does this have in terms of the legal treatment of the impossibility? [Paragraph numbers [75]-[85], extracted at pages 392-3]

(c) What did Lord Phillips claim was the legal or theoretical basis for the decision of the House of Lords in Bell v Lever Brothers? On what basis did he reach this conclusion and how does this relate to previous case law? [Paragraph numbers [61]-[74] and [82], extracted at page 395]

(d) Is it possible to secure a remedy at common law where it is still technically possible to perform in accordance with the contractual terms? What did Lord Phillips identify as the test to determine whether a common mistaken assumption renders performance of the contract, as originally agreed, impossible? [Paragraph number [55], extracted at page 403]

(e) How likely is it that this test will be satisfied? [Paragraph number [86], extracted at page 403]

(f) What did Lord Phillips say on the question of the relationship between the decision of the House of Lords in Bell v Lever Brothers and the decision of the Court of Appeal in Solle v Butcher? [Paragraph numbers [153]-[160], extracted at pages 407-8]

(g) Most significantly, what is the effect of this decision in terms of the availability of remedies for common mistake? What practical consequences might follow? [Paragraph numbers [157] and [161], extracted at page 624, and see the discussion at pages 408]

(h) What was the effect of this decision on previous case law authority, i.e., which case(s) were applied and which case was not followed? [Examine the headnote]