CHAR_A01.PDF, page 1-18 @ Normalize ( CHAR_A01.QXD )

further bargained with the builders that they would complete by that date if more
money was paid. So the carpenters could be seen to be doing no more than was
their original duty, but using that to ask for more money. On the other hand, it
could be argued that the builders had made a calculated choice in agreeing to
pay the carpenters, and avoiding the extra payment to the owners was of
practical and financial benefit to them. The case is certainly an example of the
courts making a real effort to consider the commercial reality of the difficulties
faced by the parties in financial crisis, and in the context of recession in their
trade. However, there has been a decided unwillingness to extend the principle
any further at present, and this was seen in Re Selectmove (1995) where the
court refused to apply the arguments of Roffey to part payment of a debt.
Following an arrangement to pay the Inland Revenue in instalments, a claim was
made that interest should not be payable, as the Inland Revenue had the practical
advantage of not having to go to any further trouble to recover the debt. This
could be viewed at least in part as a policy decision since it involved payment to
the Inland Revenue, not an individual. More recently the case of Simon
Container Machinery v Emba Machinery(1998) followed the decision in
Roffey, consideration being found in the practical benefit of avoiding the
problems that would have been caused by the withdrawal of the other party from
the contract.

Performance of an existing contractual duty owed to a
third party

A promise by A to B, to do something which A is already obliged to do
under a contract with a third party, C, can be good consideration.

Consideration 55

Scotson v Pegg(1861)

Scotson x

Pegg

Promised to

unload coal

Promised to

deliver coal

Promised to deliver coal

Promised to pay for coal

The same consideration

promised to two different

parties

Figure 3.3