5

A Bird in the Hand: Consideration

and Contract Modications
MINDY CHEN-WISHART*

1. introduction

English contract law has accepted for centuries that a sufcient reason
for enforcing a promise is that it is part of a freely agreed exchange
between two parties. It explains why a promisee is entitled to enforce
the promise and why her remedy should be based on her expecta-
tion (the distinctively contractual measure of enforcement); namely,
because she has paid for it. Formalities and reliance provide excep-
tional reasons for the (sometimes partial) enforcement of promises,
but bargain is overwhelmingly the usual one. Yet the literature on the
consideration doctrine is conspicuous in the intensity and depth of the
hostility it has inspired. It is described as an enormous and shapeless
grab bag; uncertain in scope, and in places overly technical, articial,
internally incoherent, and inconsistent with the parties intentions.1 It
is commonly explained as a historical accident; the result of the tyr-
anny exercised in English law by the mediaeval forms of action. Lord
Goff observed in White v Jones2 that: our law of contract is widely seen
as decient in the sense that it is perceived to be hampered by the
presence of an unnecessary doctrine of consideration.
Abolition has been urged.3 The 1937 Law Revision Committee in its
Sixth Interim Report4 proposed extending the enforceability of prom-
ises in a wide range of circumstances. The Law Commissions report
(implemented by the Contracts (Rights of Third Parties) Act 1999)

* Reader in Contract Law, University of Oxford, and Tutor in Law, Merton College,

Oxford.
1 See, eg P Atiyah, Consideration: A Restatement in (ed) Essays on Contract (Oxford:

Clarendon Press, 1986) 181; EW Paterson, An Apology for Consideration (1958) 58 Columbia
L Rev 929.
2 [1995] 2 AC 207, at 2623.
3 L Wright, Should the Doctrine of Consideration Be Abolished? (1936) 49 Harv L

Rev 1225.
4 Statute of Fraud and the Doctrine of Consideration (1937), Cmnd 5449, paras 26-40, 50.

See similarly the Ontario Law Reform Commission Report on Amendment of the Law of Con-
tract (Report No 85, 1987), ch 2.

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 90 Formation

commented that the doctrine of consideration may be a suitable topic

for a future separate review.5 Professor Burrows concludes that:6
The law would be rendered more intelligible and clear if the need for
consideration were abolished and gratuitous promises which have been
accepted or relied on were held to be binding (subject to the operation of
normal contractual rules relating to, for example, the intention to create
legal relations, duress, and illegality).
Nevertheless, the wholesale extermination of the consideration doc-
trine is unlikely any time soon. One reason is, paradoxically, the very
reason for dissatisfaction with the consideration doctrine in the rst
place, namely, its uncertainty (or, which amounts to the same thing,
its exibility). The result is that, in practice, the consideration require-
ment causes little injustice or difculty. My argument here is that,
whatever we might ultimately conclude about the desirability of the
consideration doctrine, we can resolve the most glaring target of criti-
cism within the doctrine itself, without articiality or deviation from
the core idea of contract as exchange.
This is the problem traditionally posed by the requirement of con-
sideration for the enforcement of one-sided contract modications;
onesided in the sense that one party promises to give more for the
same reciprocal obligation (an adding modication), or to accept a
reduced reciprocal obligation (a subtracting modication) from, the
other party. Stilk v Myrick7 and Foakes v Beer8 stand for the orthodox
answer that such modications are never enforceable because the
promisee gives nothing in exchange for the modifying promise; she
merely undertakes to perform (or partly perform) what she was already
obliged to do. This apparently logical position has been described as
the most harmful distortion that has distracted attention from its
central ideabargain as a ground for enforcing promises.9 While the
concern to protect the sanctity of contract and to prevent opportunistic
exploitation point against enforcement, the stark reality is that change
of circumstances (external or internal to the promisee) may make her

5 Law Commission Privity of Contract: Contracts for the Benet of Third Parties (Law

Com No 242 Cmnd 3329, 1996) para 6.17.

6 Improving Contract and Tort: the View from the Law Commission in A Burrows, Under-

standing the Law of Obligations (Oxford: Hart Publishing, 1998) 197, citing H McGregor, Con-
tract Code Drawn up on Behalf of the English Law Commission, and the Unidroit Statement of
Principles for International Commercial Contracts, art 3.1
7 Stilk v Myrick (1809) 2 Campbell 317.
8 Traceable to Pinnels Case (1602) 5 Co Rep 117a.
9 J Dawson, Gifts and Promises: Continental and American Law Compared (Yale: Yale Univer-

sity Press, 1980) 4.

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 Consideration and Contract Modifications 91

contractual performance practically impossible without some adjust-

ment by the promisor. No less than Professors Treitel and Reynolds
have observed that these cases are of great difculty. The task of
weighing these conicting factors is a delicate one.10
The enforceability of an agreement is subject to a two-stage test.11
Stage one deals with formation and broadly requires the parties
intention to be bound and an exchange signied by the consider-
ation requirement. Only after an agreement satises stage one does
the question of vitiation arise at stage two; namely, whether a prima
facie valid contract should nevertheless be set aside in the particu-
lar circumstances. It is here that the concern to prevent opportunistic
exploitation by the promisee properly belongs, to be resolved under
the rubric of duress. My concern is how we get past stage one. The
modern case law has thrown up three main solutions which mirror
the major reasons for some enforcement of promises; namely, bargain
consideration, reliance, and serious intention.

2. consideration

While Williams v Roffey Brothers12 afrms the Stilk v Myrick require-

ment of fresh consideration for adding promises, it crucially overrules
the decision by recognizing fresh consideration in the promisees mere
promise to perform his pre-existing contractual obligations where the
promisor obtains in practice a benet, or obviates a disbenet.13 The
risk of opportunistic exploitation was held to be adequately dealt with
by reference to the doctrine of economic duress. I previously criti-
cized the decision in Williams v Roffey.14 While I stand by these criti-
cisms, I now see them as resolvable by a renement of the practical
benet approach; an approach which is preferable to the alternatives
being mooted.

10 F Reynolds and G Treitel, Consideration for the Modication of Contracts (1965) 7

Malaya L Rev 1, 22.

11 HLA Hart, The Ascription of Responsibility and Rights in Proceedings of the Aristotelian

Society (1948) 49; also in A Flew (ed) Logic and LanguageFirst Series (Basil Blackwell, 1952)
145, 173.
12 [1991] 1 QB 1.
13 Ibid, 15-16; followed in Adam Opel GmbH and Renault SA v Mitras Automotive (UK) Ltd

[2008] EWHC 3205.

14 Consideration, Practical Benet and the Emperors New Clothes in Beatson and Fried-

mann (eds), Good Faith and Fault in Contract Law (Oxford: Oxford University Press, 1995)
12350.

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 92 Formation

(a) A bird in the hand

My main criticism was of Roffeys acceptance that the mere promise to

perform a pre-existing duty can confer practical benet and so be good
consideration for the reciprocal promise to pay more. A re-promise to
do something already owed to the promisee really gives her nothing
more than she had before. The crux of the widespread discontent with
the traditional bar against one-sided modications is our belief that: A
bird in the hand is worth two in the bush;15 the practice of selling debts
at a discount on their face value tells us so. Logically, then, a bird in
the hand must be worth more than one in the bush. This is recognized
in Williams v Roffey,16 and by those who deny that one-sided modi-
cations are gratuitous.17 This suggests that adding and subtracting
promises should be enforceable so long as the promisor receives the
stipulated bird in the hand. But precisely in what sense does this give
the promisor more than she had before?
To answer this question we need to x the baseline against which
the more consideration should be measured. Two are possible. First,
the baseline can be xed by reference to the eye of the law. Stilk v

15 Foakes v Beer 9 App Cas 607 at 622 (emphasis added): Lord Blackburn noted his convic-

tion that all men of business, whether merchants or tradesmen, do every day recognise and
act on the ground that prompt payment of a part of their demand may be more benecial to
them than it would be to insist on their rights and enforce payment of the whole. Even where
the debtor is perfectly solvent, and sure to pay at last, this is often so. Where the credit of the
debtor is doubtful it must be more so. And see Collier v Wright [2007] EWCA Civ 1329, [2008]
1 WLR 643 at [3] where Arden LJ notes that Pinnels Case frustrates the parties expectations
and makes it difcult to make modications when this may be commercially benecial for
both parties to do.
16 Ibid, at 20-1, Purchas LJ notes that there were clearly incentives to relieve [Williams]

of his nancial difculties and also to ensure that he was in a position, or alternatively was
willing, to continue with the sub contract works to a reasonable and timely completion.
Businessmen know their own business best even when they appear to grant an indulgence.
See also Russell LJ at 19.
17 B Coote, Consideration and Benet in Fact and in Law (1990) 2 Jl of Contract L 23; FMB

Reynolds and G Treitel, Consideration for the Modication of Contract (1965) 7 Malaya L
Rev 1; J Beatson, Ansons Law of Contract (28th edn, Oxford: Oxford University Press, xx),
125-6; H Kotz and A Flessner, European Contract Law, vol 1 (Oxford: Oxford University Press,
1977), 68-71. In Antons Trawling Co Ltd v Smith [2003] 2 NZLR 23, at [92]: insofar as con-
sideration serves to exclude gratuitous promise, it is of little assistance in the context of
on-going, arms-length, commercial transactions where it is utterly ctional to describe what
has been conceded as a gift, and in which there ought to be a strong presumption that good
commercial considerations underlie any seemingly detrimental modication. See also B
Reiter, Courts, Consideration and Common Sense (1977) 27 University of Toronto L J 439, 507;
and MA Eisenberg, The Principles of Consideration (1982) 67 Cornell L Rev 640, at 644: The
proposition that bargains involving the performance of a pre-existing contractual duty are
often gratuitous is empirically far-fetched.

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 Consideration and Contract Modifications 93

Myrick and Foakes v Beer take this approach. The eye of the law sees
a contract right as the right to contractual performance and this, in
turn, is equated with the receipt of performance. On this view, the
promisor gets nothing more when she gets her hands on the stipu-
lated bird than she originally had (the right to the bird in the bush).
The problem is that if you start with a legal ction, you are bound to
end up with some odd results. Here, you prevent the promisor from
bargaining for actual performance or part performance because the
promisee knows that the law will not enforce it.
We should be wary of tracking logical deductions beyond com-
mon sense. An analogy can be drawn with the perverse outcomes that
would follow from rigid adherence to the postal acceptance rule. An
offeree who posts her acceptance, then immediately changes her mind
and tells the offeror that she rejects the offer before her letter arrives
would nevertheless be bound if the offeror insists (although the offeror
is not prejudiced and the parties were never in agreement). If the off-
eror had relied on the offerees apparent rejection and sells to another,
he may be in breach if the offeree insists on her postal acceptance. It
is unsurprising that few, if any, judges or writers have been prepared
to follow all these deductions to their logical conclusion.18 Equating a
right to performance with the receipt of performance creates a baseline
against which the value of actual performance over the right to perfor-
mance simply disappears. As Dawson observes, within the limits of
the obligation their agreement had created, the parties had destroyed
their own power to contract. 19 We need an alternative baseline which
is intellectually coherent, yet sufciently open to account for human
and legal realities.
The second, and preferable, baseline is xed by reference to the eyes
of the parties. We bargain for performance, but what we get is a more
fragile right in remedial terms. The unpalatable truth is that there is
no straightforward equivalence between the two. In recognizing the
possibility of gain-based damages for breach of contract in Attorney-
General v Blake, Lord Nicholls20 noted Lionel Smiths argument21 that
contract rights should be protected as strongly from expropriation by
the defendants breach as property rights (which traditionally yield

18 Treitel: The Law of Contract (12th edn, London: Thomson Sweet & Maxwell, 2007) para

2-033.
19 J Dawson, Gifts and Promises: Continental and American Law Compared (Yale: Yale Univer-

sity Press, 1980) 210.

20 [2001] 1 AC 268, at 283.
21 L Smith, Disgorgement of Prots of Contract: Property, Contract and Efcient Breach

(1995) 24 Canadian Business L J 121.

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 94 Formation

gains-based remedies). However, it is trite law that many features of

contract law are inconsistent with the protection of an innocent partys
performance interest.22 Unless contractual performance comprises the
payment of money, an innocent partys right to performance will not
normally translate into actual performance or its moneys-worth in
remedial terms. Against this baseline, the receipt of actual performance
or part performance may well give the promisor more than she had
before. Likewise, it may be a detriment for the promisee to perform a
pre-existing duty. This is clear where a promisee would otherwise risk
bankruptcy. But even when solvent, the promisees performance might
be more advantageously applied elsewhere and her liability for breach
will generally bear no relationship to the extent of this advantage.23
The potential availability of gain-based damages24 does not substan-
tially undermine this argument given its very exceptional nature, and
the uncertainties surrounding its basis,25 availability,26 and measure.27
Professor Coote objects to this line of reasoning because it would
necessitate some break in the link between a contract and its per-
formance which is inherent in the concept of an enforceable legal
obligation.28 It appears to contradict the idea of contract as cre-
ating binding obligations and to support the Holmesian heresy
that the contractual obligation is only to perform or pay damages

22 For example, the rarity of gain-based damages itself; the limited availability of specic

performance; agreed damages clauses are unenforceable if they amount to penalties or indi-
rect specic performance; agreed specic performance will generally be unenforceable; rules
such as remoteness and mitigation cut back the expectation damages to leave the claimants
pecuniary losses inadequately compensated, meanwhile her non-pecuniary losses from the
breach (anxiety, annoyance, and so on) and from seeking legal redress (typically delay, has-
sle, time, and effort) are not normally compensable at all; punitive damages are generally
rejected; and the innocent party may even be prevented from afrming and performing the
contract on the others breach if it would be wholly unreasonable to do so.
23 P Atiyah, Essays on Contract (Oxford: Clarendon Press, 1986) 190 quoting Corbin on

Contracts (rev edn, 1963) vol 1, para 172.

24 Attorney-General v Blake [2001] 1 AC 268.
25 Ibid, at 920. The remedy is available when (i) contract remedies would be inadequate; (ii)

the claimant has a legitimate interest in preventing the defendant from making or retaining
his prots, and (iii) all the circumstances of the case.
26 Contrast Esso Petroleum Co Ltd v Niad Ltd [2001] EWHC 458 (Ch) with AB Corp v CD Co

(The Sine Nomine) [2002] 1 Lloyds Rep 805.

27 For example, 5% was awarded in Wrotham Park v Parkside Homes [1974] 1 WLR 798,

100% in Attorney-General v Blake; 30-50% in Lane v OBrien Homes Ltd [2004] EWHC 303; the
case was sent back for quantication of the reasonable user in Experience Hendrix LLC v PPX
Enterprises [2003] EWCA Civ 323, (2003) EMLR 25 and for damage to the innocent partys
reputation in WWF World Wide Fund for Nature v World Wrestling Federation Entertainment Inc
[2007] EWCA Civ 286, [2008] 1 WLR 445.
28 B Coote, Consideration and Benet in Fact and in Law (1990) 2 J of Contract L 23, at 28.

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 Consideration and Contract Modifications 95

for non-performance.29 Purchas LJ recognized in Williams v Roffey that

it was open to the plaintiff to be in deliberate breach of the contract in
order to cut his losses commercially.30 His Lordship conceded that
the suggestion that a contracting party can rely on his own breach to
establish consideration is distinctly unattractive31 and it is certainly
arguable that exploitation of the inadequacies of contract remedies
should not be recognized as valid consideration to support one-sided
modications.32
However, recognition that the contractual right will not always be
vindicated by an order for specic performance or the cost of cure
need not contradict the idea that contract law recognizes a duty to per-
form or mean that the remedy determines the right.33 It is simply that
the law on contractual remedies is not solely concerned with vindicat-
ing performance. This must be weighed against contract laws other
concerns, for example, to avoid waste and unnecessary harshness to
the contract-breaker; encourage mitigation; promote nality in dis-
pute resolution, and terminate hostile relationships. If we accept these
concerns as important and legitimate, then inadequacy of remedies,
to that extent, is inevitable. We can agree with Professor Friedmann
that that the essence of contract is performance. Contracts are made
in order to be performed.34 But, this just xes the starting point from
which deviation is not only possible, but likely, in recognition of the
other interests in play. Those who support the primacy of the perfor-
mance interest recognize the need to qualify its protection in many
circumstances. No value is absolute; the fact that multiple policies are
at work in our contract law means that trade-offs will be required.
Thus, it is widely accepted that where harm can be remedied in differ-
ent ways, the law should opt for that which is least restrictive of the
defendants liberty.35

29 OW Holmes, The Common Law (1881) 298. See P Atiyah, Holmes and the Theory of Con-

tract in (ed) Essays on Contract (Oxfrd: Clarendon Press, 1986), 59ff.

30 [1991] 1 QB 1, at 23.
31 Ibid.
32 S Williston, Successive Promises of the Same Performance (1894-95) 8 Harvard L Rev 27,

301.
33 As suggested by Holmes and Atiyah, above, n 29.
34 D Friedmann, The Performance Interest in Contract Damages (1995) 111 LQR 628, at

629; C Webb, Performance and Compensation: An Analysis of Contract Damages and Con-
tractual Obligation (2006) 26 Oxford J of Legal Studies 41.
35 D Kimel, Remedial Rights and Substantive Rights in Contract Law (2002) 8 Legal The-

ory 313. Compelling specic behaviour is more oppressive than requiring the payment of
damages, particularly where the former is backed by a nding of contempt of court, poten-
tially punishable by imprisonment. If a money award of a ne were the penalty, courts
may be more prepared to order specic performance as in France or Germany. See H Beale,

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 96 Formation

To press the point, unless contract law is prepared to make specic

performance the primary remedy, backed up by the cost of cure or
account of prots from breach, then, ironically, in order to protect the
promisors performance interest, contract law should concede that
obtaining actual performance will often be more valuable than simply
the right to sue for non-performance. The eye of the law should defer
to the eyes of the parties so long as contract law does not fully pro-
tect the performance interest, particularly when the concern to prevent
opportunistic exploitation can be controlled directly at stage two by
the doctrine of economic duress.36

(b) The unilateral contract device

A bird in the hand is better than one in the bush. On this view, the
promisor of additional payment is not intending to buy the same right
twice. She is now bargaining for actual performance.37 This describes
a unilateral contract: the promisors offer to pay more (or accept less)
is only accepted if the promisee actually completes the stipulated part
of the promisees pre-existing contractual duty. The bilateral contract
analysis in Williams v Roffey will not do the job. The Court of Appeals
acceptance of the promisees mere repromise to perform her pre-existing
contractual duty provoked Professor Cootes comment that consider-
ation in a bilateral contract is required for the formation of a contract.
Performance, ex hypothesi, comes too late to qualify.38
A complete answer is provided by supplementing the original bilat-
eral contract with a collateral unilateral contract to pay more (or accept
less) if actual performance is rendered. This unilateral contract can
prevail over an inconsistent term in the main written contract.39 But if
the unilateral contract does not eventuate, because the promisee fails
to render the stipulated performance, then the original contract retains
full force. This avoids the absurd and unjust results of a bilateral con-
tract analysis which would leave a promisor of additional payment

A Hartkamp, H Kotz, and D Talon, Ius Commune Casebook for the Common Law of Europe:
Contract Law (Oxford: Hart Publishing, 2002) 68081.
36 TE Robison, Enforcing Extorted Contract Modications (1983) Iowa L Rev 699, 751.
37 In Newman Tours Ltd v Ranier Investment Ltd [1992] 2 NZLR 68 at 80, Fisher J applied
Williams v Roffey Bros, saying: the agreement to perform [its] existing contractual obligations,
followed by actual performance in reliance upon that subsequent agreement, can constitute
fresh consideration.
38 Consideration and Benet in Fact and in Law (199091) 3 J of Contract L 23, at 26.
39 See City and Westminster Properties (1934) Ltd v Mudd [1959] Ch 129; Brikom Investments

Ltd v Carr [1979] QB 467; Harling v Eddy [1951] 2 KB 739; Mendelssohn v Normand Ltd [1970]
1 QB 177.

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 Consideration and Contract Modifications 97

worse off than before because her damages would be reduced by the
original and additional sums she undertook to, but now need not, pay.40
A bilateral contract analysis of relieving promises yields the same per-
verse outcome. If the promisee fails to render the lesser performance,
the promisors claim would be conned to that lesser performance.41
Consistently, the Ontario Law Reform Commission states that where
the promisee of additional payment fails to perform, the appropriate
deduction is the original sum promised, and not the greater modied
sum; it would be an implicit understanding between the parties that
failure to comply with the terms of the new agreement would revive
the old one.42 Likewise, subtracting promises are binding subject to
actual performance by the promisee.43 The promisor has agreed to
accept less on the ground that a bird in the hand is worth two in the
bush. It would be unfair, in such a case, to limit the rights absolutely
to the single bird of the subsequent agreement. The same reasoning
underlies the 1937 Law Revision Committees recommendation on
reversing the effect of Pinnels Case.44 It would be more straightforward
to say that, in both cases, the promisors liability on the additional
promise only crystallizes on the promisees performance on a unilateral
contract analysis.
A unilateral contract analysis avoids another potentially anomalous
result, instanced by Pao On v Lau Yiu Long.45 The parties exchanged
shares in their companies. P also agreed to delay selling 60per cent of
the shares received for at least a year to avoid triggering a fall in their
value; L agreed to buy back those shares at a xed price at or before
the end of the year. When P realized that it would be disadvantaged
if the shares rose above the xed price, he refused to proceed unless
L agreed to a guarantee by way of indemnity (if the shares fell below the

40 For example, X promises to pay Y 5,000 for a job; later X promises another 3,000 (total

8,000), but Y still does not perform and it would cost X 10,000 for substitute perform-
ance. The expectation damages under the original contract is 10,0005,000, while under
the modied contract it would be 10,0008,000.
41 X promises to accept 70 in discharge of Ys debt of 100 in the hope of actually getting

70, but, if Y disappoints, Xs claim is conned to 70.

42 Ontario Law Reform Commission Report on the Amendment of the Law of Contract

(No 82, 1987) 1213, discussing the promise to accept part performance.
43 Ibid, 10, 1213.
44 Sixth Interim Report on the Statute of Frauds and the Doctrine of Consideration, Cmd 5449,

paras 33-5: It would be possible to enact only that actual payment of the lesser sum should
discharge the obligation to pay the greater, but we consider that it is more logical and more
convenient to recommend that the greater obligation can be discharged either by a promise
to pay a lesser sum or by actual payment of it, but that if the new agreement is not performed
then the original obligation shall revive.
45 [1980] AC 614.

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 98 Formation

xed price). L agreed in order to avoid the delay and loss of public
condence that legal action against P would attract at a critical time
in their companys restructuring. Moreover, L believed that the risk
entailed in the modication was more apparent than real. When the
share price plummeted, L would neither buy back the shares under the
original contract (alleging this arrangement was ended by the modi-
cation) nor indemnify P under the modied bilateral contract (alleging
that it was voidable for duress). The modication was upheld. How-
ever, the Privy Council opined that, even if duress had been found, it
would not have countenanced the stark injustice of denying P the
safeguard which all were at all times agreed [P] should havethe safe-
guard against fall in value of the shares.46 A unilateral collateral con-
tract analysis of the modication would restrict the vitiating effect of
any duress, leaving the original contract in place.

(c) The award in Williams v Roffey

A unilateral contract analysis of the promise to pay more comes clos-

est to explaining the damages actually awarded in Williams v Roffey.
Williams had already received more than 80 per cent (16,200) of the
20,000 originally agreed for the work on the 27 ats when Roffey
Brothers promised an extra 575 if, as and when he nishes each of the
18 remaining ats on time. Williams claimed his expectation of 10,847,
which is slightly more than the additional sums for the remaining ats
(18 x 575 = 10,300). This should have followed logically from the
Court of Appeals bilateral contract analysis (even with an entire obli-
gations overlay)47 since it was Roffey Brothers breach (by paying only
1,500 more although Williams had completed eight further ats) that
entitled Williams to terminate.
However, the trial judge, with whom the Court of Appeal agreed,
only awarded 3,500. Glidewell LJ explains the calculation:48 the
judge started with 4,600 (being 8 x 575) less some small deduc-
tion for defective and incomplete items. Additionally, Williams was
entitled to a reasonable proportion of the sum outstanding from the
original price.49 This entitled Williams to 5,000. From this is deducted

46 Ibid, at 635.
47 Williams v Roffey Bros [1991] 1 QB 1 at 8-10, 16-17; and 23.
48 Ibid, at 6.
49 This should be 3,800 although the trial judge said 2200 and Glidewell LJ said 2,300.

The error probably occurred because Roffey Brothers made an additional payment of 1500
(3,8001500 = 2,300). However, this was credited twice by being deducted again from
Williams original entitlement of 5,000.

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 Consideration and Contract Modifications 99

the 1,500 already paid, leaving the nal gure of 3,500. Since Rof-
fey Brothers offer is to pay a specic sum on completion of specied
work, this can be interpreted as 18 separate unilateral offers. One inter-
pretation is that Williams only accepted eight of these by substantial
performance; by ceasing work, it accepted no more.

(d) Revocation of the unilateral offer

An alternative interpretation is that Roffeys breach (in not paying)

amounts to an implied revocation of its unilateral offers in respect of
the incomplete ats. Since there is no suggestion that Williams had com-
menced work on these ats or that Roffey prevented Williams from
further performance, there is nothing to stop Roffey from revoking its
offer. A third interpretation is that Roffeys unilateral offer is for com-
pletion of all 18 ats. On this view, we would run into the supposed
rule that the unilateral offer can be accepted as soon as the offeree
has unequivocally begun performance of the stipulated act or absten-
tion, so that the offer can no longer be withdrawn.50 But, is there a
universal rule to this effect?
On the yes side is the judgement of Denning J in Errington v
Errington.51 A father promised his son and daughter-in-law that if they
paid off the mortgage, amounting to two-thirds of the value of the
house they were all living in, it would be theirs. When the father died
nine years later and a substantial part of the mortgage had been paid,
the Court of Appeal prevented his representatives from revoking the
arrangement because the couple had commenced payment, provided
that their performance was not left incomplete and unperformed52
Aside from this family case, there is only Court of Appeal dicta in
Daulia Ltd v Four Millbank Nominees Ltd53 (involving an unenforce-
able oral agreement for property) and Soulsbury v Soulsbury54 (where
no question of revocation arose because the stipulated performance
of a family arrangement was completed). On the other side is Luxor
(Eastborne) Ltd v Cooper.55 The House of Lords denied a real estate
agents claim for a 10,000 commission payable on completion of a
sale when the agent found buyers but the owners refused to complete.
The commission was the equivalent of a Lord Chancellors annual pay

50 Chitty on Contracts, (30th edn, London: Sweet & Maxwell, 2008) para 2-079.
51 [1952] 1 KB 290.
52 Ibid, at 295.
53 [1978] Ch 231, especially at 239.
54 [2007] EWCA Civ 969, [2008] 2 WLR 834, at [50].
55 [1941] AC 108.

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 100 Formation

for work done within eight or nine days. The court held that the com-
mon understanding was that estate agents take the risk in the hope of
a substantial remuneration for comparatively small exertion.56
It is tempting to opt for a clear rule prohibiting or permitting revo-
cation of the modifying offer once performance has commenced. How-
ever, the answers never or always will sometimes yield unintended
and unjust results. In Morrison Shipping Co v The Crown57 the Lord
Chancellor doubted: whether a conditional offer in general terms,
whether made to the public (as in the Carbolic Smoke Ball case) or to a
class of persons, is converted into a contract so soon as one of the per-
sons to whom the offer is made takes some step towards performing
the condition. The Federal Court of Australia in Mobil Oil Australia
Ltd v Wellcome International Pty Ltd and Others58 declined to recognize
a universal proposition that an offeror is not at liberty to revoke the
offer once the offeree commences or embarks upon performance of
the sought act of acceptance. The issue is one of construction, but also
of protecting a performing offeree from exploitation by the offeror.59
These features will vary greatly from case to case. Relevant factors
would include:
(i) ConstructionThe parties intention or the prevailing convention
(eg estate agents contracts) as to whether the offeror should be
able to withdraw at any time (ie a locus poenitentiae) which may be
inferable from other relevant factors.
(ii) The length of time over which the offeror would have to keep the
offer open without knowing whether the offeree will complete
the act. Errington v Errington60 involved a lengthy period but was
a family property case where the parties were not considering
future possibilities at arms length.61
(iii) Whether the stipulated performance requires the offerors cooperationif
so, it is less likely that the parties intended to bar revocation (eg
real estate agents contract and by analogy to the test of whether
afrmation is available).
(iv) The extent of performanceThe demands of justice will vary
between an offeree who has completed 1 per cent of the stipu-
lated performance from one who has completed 99 percent.

56 Ibid, at 126.
57 (1924) 20 Ll L Rep 283, at 287.
58 (1998) 153 ALR 196, at 228.
59 This mirrors the concern to protect the promisor from the promisees exploitation via

duress.
60 [1952] 1 KB 290.
61 Ibid, at 293.

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 Consideration and Contract Modifications 101

Revocation should be barred if the offeree has incurred signicant

reliance or change of position (eg by not declaring bankruptcy) or
has substantially completed the stipulated performance (by anal-
ogy to the entire obligations rule).62
(v) The extent of benet conferred on the offeror by the offerees part per-
formance.
(vi) AcquiescenceWhether the offeror knows of the offerees com-
mencement of performance. In Soulsbury v Soulsbury63 Waller LJ
thought it inconceivable that the offeror should be free to watch
[the offeree] work once the offer had been made, take advantage
of the work done and then revoke the offer.
(vii) Subsequent change of circumstancesRevocation should be permit-
ted if the modifying offer was made on a common assumption
which is untrue or does not eventuate (eg you offer to pay more
or accept less because of dramatic price increases which then fall
back quickly to their original level) or the promisor has reason to
lose condence in the promisees ability to perform and can sal-
vage the situation with a substitute.
In Mobil Oil Australia Ltd64 franchisees of Mobil alleged that Mobil
could not revoke its nine-for-six offer (to give nine additional years
of franchise free if the franchisee obtained at least 90 per cent in the
annual Circle of Excellence judging for six years). The court found
no implied offer not to revoke because the act of acceptance was ill-
dened and the franchisees were already obliged to achieve high stan-
dards in order to run an efcient business. The court questioned the
suggestion that the attainment of 90 per cent in the rst year or even
perfect operation of the service station for a day, a week or a month,
albeit by reference to the offer, represents a commencement of attain-
ment of 90 per cent in all six years so it is immediately to bind mobile
not to revoke?65
Even if an offeror has impliedly promised not to revoke on com-
mencement of the stipulated performance, it does not follow that a
purported revocation would be ineffective. In the absence of specic
relief in respect of that implied promise, the offeror will simply be liable
to damages; but on what measure? The most obvious is loss of expec-
tation measured by the chance that the performance would have been

62 Hoenig v Isaacs [1952] 2 All ER 176.

63 [2007] EWCA Civ 969, [2008] 2 WLR 834, at [44].
64 (1998) 153 ALR 196, at 228.
65 Ibid, at 224.

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 102 Formation

completed66 less the expenses saved or, where completion depends on

the hypothetical acts of third parties, by reference to the offerees loss of
a chance.67 Chitty puts forward an intermediate possibility68 by anal-
ogy to White & Carter Ltd v McGregor.69 Namely, that the offeree should
cease performance and recover damages amounting to his expenses
unless she has a substantial legitimate interest in completing perfor-
mance. A third possibility is put forward by the Lord Chancellor in
Morrison Shipping Co v The Crown: 70 It may be that, when work is done
and expense incurred on the faith of a conditional promise, the promi-
sor comes under an implied obligation not to revoke his promise, and
if he does so may be sued for damages or on a quantum meruit.

3. promissory estoppel in collier v wright

Lord Denning opened the way to using the promissory estoppel doc-
trine in Hughes v Metropolitan Railway Co71 to enforce relieving prom-
ises in Central London Property Trust v High Trees House Ltd.72 His
Lordship staked further ground for the equitable doctrine in dicta in
D&C Builders v Rees.73 Namely, that it is in principle, although not on
the facts, applicable to part payment of a debt agreed by the parties
to discharge the whole debt. In Collier v Wright74 the Court of Appeal
applied the dicta in Rees to override the House of Lords decision in
Foakes v Beer.75 Collier and his two former business partners were
jointly indebted to Wright for 46,800, each servicing his share. When
Colliers former partners ceased paying, Collier alleged that Wright
told him to continue his payments and Wright would chase the other
debtors. Over four years later, when Collier had repaid his third of the
debt, Wright demanded the other two-thirds from Collier.

66 Mobil Oil Australia Ltd v Wellcome International Pty Ltd and Others (1998) 153 ALR 196,

at 225.
67 Allied Maples v Simmons & Simmons [1989] 1 WLR 1602; and see Schweppe v Harper [2008]

EWCA Civ 442, at [53].

68 Chitty on Contracts (30th edn, London: Sweet & Maxwell, 2008) para 2-086.
69 [1962] AC 413; and see P Atiyah, Consideration: Restatement in (ed) Essays on Contract

(Oxford: Clarendon Press, 1988) 204.

70 Morrison Shipping Co v The Crown (1924) 20 Ll L Rep 283, at 287.
71 (1876-77) LR 2 App Cas 439.
72 [1947] KB 130.
73 [1966] 2 QB 617.
74 [2007] EWCA Civ 1329; [2008] 1 WLR 643.
75 (1883-84) LR 9 App Cas 605.

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 Consideration and Contract Modifications 103

In a preliminary hearing, the Court of Appeal found that although

Collier gave no consideration on the authority of Foakes v Beer and Re
Selectmove,76 he had established a genuine triable issue on promis-
sory estoppel. If Wright had given the alleged undertaking, which was
unclear, Colliers subsequent part payment would, without more, bar
Wright from suing for the balance. Arden LJ reformulated the promis-
sory estoppel doctrine:77
[I]f (1) a debtor offers to pay part only of the amount he owes; (2) the credi-
tor voluntarily accepts that offer, and (3) in reliance on the creditors accep-
tance the debtor pays that part of the amount he owes in full, the creditor
will, by virtue of the doctrine of promissory estoppel, be bound to accept
that sum in full and nal satisfaction of the whole debt. For him to resile
will of itself be inequitable. In addition, in these circumstances, the promis-
sory estoppel has the effect of extinguishing the creditors right to the bal-
ance of the debt. To a signicant degree it achieves in practical terms the
recommendation of the Law Revision Committee chaired by Lord Wright
MR in 1937.
Collier v Wright78 is a clear break with precedent. In place of promissory
estoppels exible weighing of the parties conduct and the potential
losses, Arden LJ substitutes an absolute rule. Her Ladyships approach
substantially alters our understanding of the reliance requirement for
the purposes of promissory estoppel. The trial judge found no relevant
reliance by Collier.79 Colliers claim, that absent Wrights assurance,
he would have pursued the other debtors prior to their bankruptcy,
struck the trial judge (and Longmore LJ)80 as wild speculation given
Wrights inability to recover a single penny from them, despite being
in possession of a judgment debt.81 Indeed, Arden LJ agreed that:82
there is no evidence that Mr Colliers position now is in any material
respect different from that immediately before the agreement was made.
For instance, there is no evidence that he entered into any business ven-
ture or made any substantial investment on the strength of the agreement.
Nor is there any evidence that he could not raise the money now to meet
Wrights claim.

76 [1995] 1 WLR 474.

77 [2007] EWCA Civ 1329, [2008] 1 WLR 643, at [42].
78 A Trukhtanov, Foakes v Beer: Reform of Common Law at the Expense of Equity (2008)

124 LQR 364.

79 [2007] EWCA Civ 1329, [2008] 1 WLR 643, at [19].
80 Ibid, at [46].
81 Ibid, at [28].
82 Ibid, at [36].

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 104 Formation

Neither did the trial judge think that Colliers part payment amounted
to relevant reliance. This is unsurprising since part payment has never
previously, in itself, been sufcient to raise promissory estoppel. Oth-
erwise, one would wonder what all the fuss is about regarding Foakes
v Beer. Nevertheless, Arden LJ held that part performance per se, does
amount to the relevant reliance, and that this, without more, makes it
inequitable for the creditor to resile from the agreement, and com-
pletely extinguishes the creditors right to the balance of the original
debt. This makes the requirement of promisor unconscionability in
resiling redundant and departs from the reliance basis of the doctrine.
It cuts the doctrine adrift from its justication. The analogy with prac-
tical benet is inescapable; Collier v Wright undermines Foakes v Beer in
the same way that Williams v Roffey Brothers undermined Stilk v Myrick.
The same unilateral contract solution can be applied to both.
Longmore LJ conceded that Lord Dennings dicta in Rees seems to
have the effect attributed by Arden LJ,83 but he was distinctly unen-
thusiastic about it. He doubted that Wright had permanently foregone
its original right or that Collier had relied in any meaningful way.
His Lordship recognized that it was arguably inequitable for Wright
to resile, but thought there was much to be said on the other side,
concluding that:84
If, as Arden LJ puts it, the brilliant obiter dictum of Denning J in the High
Trees case [1947] KB 130 did indeed substantially achieve in practical terms
the recommendation of the Law Revision Committee chaired by Lord
Wright MR in 1937, it is perhaps all the more important that agreements
which are said to forgo a creditors rights on a permanent basis should not
be too benevolently construed.
Lord Dennings dicta in D & C Builders Ltd v Rees85 is weak precedent
for Colliers version of promissory estoppel. Lord Denning found his
own formulation inapplicable because Rees bad faith meant that it was
not inequitable for the builders to resile. Thus, Rees part payment did
not, per se, make the builders resiling inequitable, contrary to Arden
LJs formulation.86 The greater part of Lord Dennings judgment sim-
ply applied Foakes v Beer. Danckwerts LJs judgment spent just 14 lines
rejecting promissory estoppel (there was no true accord and no detri-
mental change of position).87 Winn LJ, giving the longest judgment, made

83 Ibid, at [45][47].
84 Ibid, at [48].
85 [1966] 2 QB 617.
86 Arden LJ could explain the outcome of Rees by saying that the builders made no prom-

ise to start with.

87 D & C Builders Ltd v Rees [1966] 2 QB 617, at 627.

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 Consideration and Contract Modifications 105

no mention of promissory estoppel at all. It is, therefore, paradoxical

that a case which applies Foakes v Beer should be interpreted in direct
contradiction of it. All three judges agreed that the modication was
unenforceable because there was no accord and satisfaction where:
The accord is the agreement by which the obligation is discharged.
The satisfaction is the consideration which makes the agreement
operative.88 In contrast, Arden LJ89 relies on Lord Dennings different
use of the terminology of accord and satisfaction90 to mean agree-
ment and part-payment.91
Adopting the unilateral contract analysis in relation to both adding
and subtracting would not only avoid the difculties raised by Collier
v Wright, it would also counter the blatant inconsistency between
Williams v Roffey92 and Re Selectmove93 which Collier v Wright perpetuates.
There is no functional difference between an adding and subtracting
promise; in both cases the promisor is getting proportionately less than
his original entitlement and the promisee is getting more. Moreover,
the unilateral contract analysis is entirely consistent with outcome in
Collier v Wright and Arden LJs requirement of actual performance.

4. abolishing consideration in adding modications

Another way around the traditional obstacle to the enforcement of

adding promises posed by the consideration requirement is to abolish
the requirement. This is the approach advocated by the New Zealand
Court of Appeal in Antons Trawling v Smith.94 Smith was employed
by Antons to sh for orange roughy. The standard agreement pro-
vided for payment as a percentage of the net value of the sh caught.

88 Chitty on Contracts, (30th edn, London: Sweet & Maxwell, 2009) para 22-012. British Rus-

sian Gazette and Trade Outlook Ltd v Associated Newspapers Ltd [1933] 2 KB 616, at 643; Bank of
Credit and Commerce International SA v Ali [1999] ICR 1068, at 1078.
89 Collier v Wright [2007] EWCA Civ 1329, [2008] 1 WLR 643, at [33], [39], and [42].
90 In D&C Builders Ltd v Rees [1966] 2 QB 617, at 625, Lord Denning MR held: Where there

has been a true accord, under which the creditor voluntarily agrees to accept a lesser sum in
satisfaction, and the debtor acts upon that accord by paying the lesser sum and the creditor
accepts it, then it is inequitable for the creditor afterwards to insist on the balance.
91 [2007] EWCA Civ 1329, [2008] 1 WLR 643, at 644. According to the Weekly Law Reports,

Collier v Wright held, inter alia, that Collier had raised a triable issue that there had been an
accord and satisfaction in that he had paid his share of the debt and the company had volun-
tarily agreed to accept the payments on that basis.
92 [1991] 1 QB 1.
93 [1995] 1 WLR 474.
94 [2003] 2 NZLR 23, citing Chen-Wishart The Enforceability of Additional Contractual

Promises: A Question of Consideration (1991) 14 New Zealand U L Rev 270 at [92].

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 106 Formation

When Smith realized the risk that this arrangement entailed when per-
forming exploratory shing, he requested a daily rate as he was enti-
tled to do under the agreement. Antons declined but agreed to give
Smith a 10 per cent share of any additional shing quota allocated by
the government to Antons as a result of Smith proving the existence
of a commercial shery. Antons argued that it was not bound by this
additional promise because Smith was already paid to sh and so gave
no consideration. The court endorsed the practical benet approach95
of Williams v Roffey. However, acknowledging the trenchant criticisms
of the decision, the court held in the alternative that consideration is
unnecessary for the variation of a contract. Baragwanath J said:96
[Denying enforcement] would be inconsistent with the essential principle
underlying the law of contract, that the law will seek to give effect to freely
accepted reciprocal undertakings. Where the parties who have already
made such intention clear by entering legal relations have acted upon an
agreement to a variation, in the absence of policy reasons to the contrary they
should be bound by their agreement.
Although the court did not have to choose between recognizing prac-
tical benet and dispensing with consideration, the two approaches
are conceptually incompatible; one liberalizes consideration, the other
abolishes it, albeit only in adding modications. The latter approach is
objectionable on a number of fronts. First, Baragwanath Js view that
[t]he importance of consideration is as a valuable signal that the parties
intend to be bound by their agreement, rather than an end in itself97
will be contested below.98 Second, if the essential principle underly-
ing the law of contract is the parties intention to be bound, then its
logic should extend to both adding and relieving promises,99 and even
to contract formation. The fact that his Honour connes his abolition
to adding promises where there is already freely accepted reciprocal
undertakings100 shows that reciprocity is not dispensable to contrac-
tual enforcement. Third, the intention to be bound approach cannot
explain why the enforceability of the promise should be conditional
on the promisee actually performance her pre-existing obligations.

95 Reference was made at [91] to a previous Court of Appeals endorsement in Attorney-

General for England and Wales v R [2002] 2 NZLR 91, at 109, which praised the approach as
appropriately paying attention to the practical realities of the parties circumstances rather
than to legal niceties.
96 [2003] 2 NZLR 23, at [93] (emphasis added).
97 Ibid.
98 See text accompanying n 110111.
99 There is no suggestion that the court intended to abrogate the rule in Foakes v Beer.
100 [2003] 2 NZLR 23, at [93] (emphasis added).

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 Consideration and Contract Modifications 107

On the other hand, this condition is entirely consistent with a unilat-

eral contract approach premised on consideration. Indeed, Baragwa-
nath J specically held that the agreement about the issue of quota
was a unilateral contract. Mr Smith did not assume the obligation of
achieving the goals so as to expose oneself to liability if he failed.101
Lastly, there is no guidance as to the content of the additional quali-
cation that enforcement of adding promises is subject to the absence
of policy reasons to the contrary.

5. abolishing consideration outright

An even more radical departure is signalled by the dicta of Andrew

Phang Boon Leong JA of the Singapore Court of Appeal in Gay Choon
Ing v Loh Sze Ti Terence Peter.102 The case was decided on the basis that
the parties had reached a valid compromise on the ordinary principles
of contract law, there being no fundamental difculties with respect
to the doctrine of consideration.103 Nevertheless, his Honour went on
to give an 11-page critique of the doctrine in anticipation of the day
that the issue of reform does squarely arise before this court in the
future.104 He explains that the doctrine might now be outmoded or
even redundant, and that its functions may well be met by more effec-
tive alternatives.105 In particular, the doctrines of economic duress,
undue inuence, and unconscionability appear to be more clearly
suited not only to modern commercial circumstances but also (more
importantly) to situations where there has been possible extortion.106
While recognizing the impossibility of enforcing all promises, his
Honours only explicit restriction is that any agreement should be
seriously intended107 because [t]he marrow of contractual relation-
ships should be the parties intention to create a legal relationship.108

101 Ibid, at [59]. This unilateral contract contains additional legal benet for Antons; namely,

the prospect of satisfying the Ministry of Agriculture and Fisheries of the existence of a com-
mercial shery in the area. The 10% deal was offered to encourage Smith to redouble his
efforts and to agree to the extensive research programme and record keeping which the
Ministry would require before issuing further quota, at [31][41].
102 [2009] SGCA 31.
103 Ibid, at [92].
104 Ibid, at [94].
105 Ibid, at [92].
106 Ibid, at [113]. Another possible alternative doctrine is promissory estoppel; see [111].
107 Ibid, at [113].
108 Ibid, at [86], citing VK Rajah JC in Chwee Kin Keong v Digilandmall.com Pte Ltd [2004] 2

SLR 594, at [139].

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 108 Formation

Consideration is dispensable because consideration is merely evi-

dence of serious intention to contract.109
The idea that consideration merely performs the functions of for-
malities has been standard fare since Fullers famous article in 1941.110
The idea is that consideration is a reasonably efcient indicator that
a promise has actually been made (evidentiary), the promisor under-
stood the consequences of making it (channelling), and took care in
making it (cautionary). Now it is true that exceptionally, nominal con-
sideration may only evince a serious intention to be bound, but it is
a mistake to conne the role of consideration in this way. Even with
consideration an oral promise may be very difcult to prove, given
impulsively or without thought of the legal consequences. Conversely,
the absence of consideration does not necessarily, or even normally,
point towards a promise being perjured, careless, or unintended.111
There can be no doubt about my seriousness in solemnly promising
you 5,000 in front of witnesses, or even in writing. Yet, you cannot
enforce my promise. In contract law, a promisor can change her mind
unless the promisee has given or promised to give a reciprocal induce-
ment for the promise.
The idea that an undertaking seriously made is sufcient to justify
its enforcement is simply wrong as a description of contract law. If it
were true, contract law would have little content. All contractual ques-
tions (When is there a contract? What are its contents? Is a contract viti-
ated? What are the remedies for breach?) would be answered by sole
reference to the parties serious intentions. The only issue becomes
one of fact nding. We would wonder why contract books need to
run to many hundreds, even thousands of pages. No legal system
does or can enforce all promises and the idea of respect for seriously
intended promises provides no guidance as to which promises should
be enforced.
Nor is the idea of enforcing every seriously intended promise
normatively attractive. First, if we value freedom of choice then we
should value equally highly an individuals subsequent abandonment
of her initial choice. There is no reason to prioritize a past choice over
a present one when both are equally valid expressions of her will.112
Second, it would be a very different world from the one we know
if we were bound by every promise, no matter how foolish, with-
out any chance of letting increased wisdom undo past foolishness.

109 Ibid, at [113].

110 Consideration and Form (1941) 41 Columbia L Rev 799.
111 A Kull, Reconsidering Gratuitous Promises (1992) 21 J of Legal Studies 39, 55.
112 A Brudner, Reconstructing Contracts (1993) 43 U Toronto LJ 1, 21.

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 Consideration and Contract Modifications 109

Certainly, some freedom to change ones mind is necessary for free

intercourse between those who lack omniscience.113 An integral part
of any valuable autonomous life is the ability to learn, change, mature
and recreate oneself. This may entail the rejection or alteration of
previous beliefs or goals. Even when account is taken of the value of
learning from ones mistakes, coerced performance of ones regretted
promises may unduly compromise ones integrity and self-respect114
(hence damages is the primary remedy for breach, rather than spe-
cic performance), or may jeopardize ones future autonomy (hence
the invalidity of slavery contracts and unreasonable restraints of trade,
and the facility of bankruptcy which allows a fresh start).
Even if we believe that the promisor should do as she promises
(for example, as a matter of self-consistency) it does not explain why
contract law should weigh in on behalf of the promisee as a matter of
justice. For this we need the doctrine of consideration.115 Contract law
will not generally assist a promisee unless she has given or promised
to give the reciprocal inducement for the promise.
It is doubtful that a substantive requirement of intention to create
legal relations will in the long run work any better than the rules of
consideration.116 There is the risk of confusion with the misnamed doc-
trine of intention to create legal relations, which is more concerned to
map the desirable boundaries of legal involvement in private affairs117
than to interrogate the parties intentions. To say that the question is
the parties intention to be bound simply begs the question: bound
to what? What rights or liabilities were intended to be transferred, cre-
ated, waived, or suspended by the promisor? Was it to be absolute
or conditional?118 It is not obvious that by promising to pay more or
accept less, a promisor necessarily intends to extinguish his original
rights absolutely and irrespective of changes of circumstances or fail-
ure by the promisee to perform under the new arrangement.
Contract orthodoxy sets a threshold of enforceability based on
bargain consideration, is restrictive of the scope of excuses for non-
performance, and normally enforces to the full extent the promisees
expectations. Expanding the basis for enforcement will necessitate the

113 M Cohen, The Basis of Contract (1933) 46 HarvL Rev 553, 572.
114 A Kronman, Paternalism and the Law of Contract (1983) Yale LJ 763.
115 E Weinrib, The Idea of Private Law (Harvard: University Press Harvard, 1995) 13640.
116 P Atiyah, Essays on Contract (Oxford: Clarendon Press, 1986) 241.
117 S Hedley, Keeping Contract in its Place: Balfour v Balfour and the Enforceability of Infor-

mal Agreements (1985) 5 Oxford J of Legal Studies 391.

118 This is the point made by Longmore LJ in Collier v Wright [2007] EWCA Civ 1329, [2008]

1 WLR 643, at [48].

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 110 Formation

appropriate recalibration of the excuses and remedies and undermine

the internal coherence of contract law. If enforcement is to be divorced
from exchange, it is not obvious what the proper remedial response
should be. The demands of justice will vary with the particular context
(whether commercial, consumer, charitable, family, and so on) and the
particular reason for enforcement (whether bargain, reliance suffered,
benet received, fullment of family responsibilities, and so on).
Thus, German and French law dene contract to include gratuitous
promises but recognize special excuses (derived from Roman law) for
the non-performance of gratuitous transactions. These include: the
donees gross ingratitude,119 the donors deterioration of circum-
stances such that he is not in a position to full the promise with-
out endangering his own reasonable maintenance or the fullment
of obligations imposed upon him by law to furnish maintenance to
others,120 and the subsequent acquisition of a child by a previously
childless donor.121 Even completed gifts are revocable in comparable
circumstances. Even more notable is the fact that the enforceability of
gratuitous promises in German and French law is subject to a stringent
formality requirement unless they are synallagmatic contracts (con-
taining bilateral reciprocal undertakings).122 This is simply a different
way of stating the common law position that an enforceable promise
must be supported by consideration unless it is accompanied by the
requisite formality.
Phang JAs view that consideration is evidence of serious intention
and that duress, undue inuence, and unconscionability can replace
consideration assumes what HLA Hart warns against. In The Ascrip-
tion of Responsibility and Rights123 Hart describes the line of reasoning
that since consent gets you into contract, only lack of consent will get
you out124 as a disastrous over-simplication and distortion of the
law on the vitiation of transactions. It fails to recognize: (i) that consent
is a necessary but not sufcient, condition of transactional liability; and

119 530 (1) of the German Civil Code (BGB); Arts 953, 955 of the French Civil Code (Code

civil). This includes, eg, serious misconduct towards the donor or a close relative, indelity
of the donee spouse, ling an unmeritorious petition to declare the donor disabled, and the
donees failure to perform an express condition.
120 519 of the German Civil Code (BGB).
121 See further J Dawson, ibid, 53.
122 320-26 of the German Civil Code (BGB); Art 1102 of the French Civil Code (Code

civil).
123 HLA Hart, The Ascription of Responsibility and Rights in Proceedings of the Aristotelian

Society (1948) 49; also in A Flew (ed.), Logic and LanguageFirst Series (Oxford: Basil Black-
well, 1952) 145, 173.
124 Ibid, 183.

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 Consideration and Contract Modifications 111

(ii) that the validity of a transaction is a two-stage inquiry, so that even

when the language of consent is used in determining both the forma-
tion and vitiation stages, they deal with qualitatively different concerns.
It is a mistake to think that there are certain psychological elements
required by the law as necessary conditions of contract and that the
defences are merely admitted as negative evidence of these. Rather,
talk of defective consent in relation to vitiating factors is conclusory,
not explanatory; it is merely short-hand for the variety of factors ren-
dering a transaction defeasible.125 Understanding this allows us to
detach the basis for vitiating transactions from the basis for enforcing
them. Space is then opened up to consider values at work other than
consent and exchange. The question is whether, in the circumstances, a
claimant should be relieved of responsibility for the transaction, despite
her consent to it.126
Consistently, Lord Scarman said that [t]he classic case of duress is
not the lack of will to submit but the victims intentional submission
arising from the realization that there is no practical choice open to
him. 127 Where this results from the defendants illegitimate pressure,
the law does not ascribe the normal responsibility it would to the vic-
tims consent. This view avoids the ction that the claimant gave no
consent despite acting knowingly and intentionally.128 Rather, it takes
the realistic and respectful view that the claimant engaged with reason
in consenting,129 but should nevertheless be excused from responsibil-
ity in the circumstances.
In 1994 I criticized Williams v Roffey for passing the buck to the
doctrine of economic duress because the latter was still too unstable
and undeveloped to distinguish appropriate one-sided modications
from the inappropriate130 For example, it is unclear how the line can be

125 Ibid, 145, 174-8 (emphasis in the original). At 180, Hart explains that the logical char-

acter of words like voluntary are anomalous and ill-understood. They are treated in such
denitions as words having positive force, yet, as can be seen from Aristotles discussion
in Book III of the Nicomachean Ethics, the word voluntary in fact serves to exclude a het-
erogeneous range of cases such as physical compulsion, coercion by threats, accidents, the
stakes, etc, and not to designate a mental element or state; nor does involuntary signify the
absence of this mental element or state.
126 Ibid, 174.
127 Universe Tankships Inc of Monrovia v International Transport Workers Federation (The Uni-

verse Sentinel) [1983] 1 AC 366, at 400.

128 P Atiyah, Economic Duress and the Overborne Will (1982) 98 LQR 197; Lynch v DPP for

Northern Ireland [1975] 1 All ER 913, 92638.

129 Hence the requirement that she has no practicable alternative.
130 Consideration, Practical Benet and the Emperors New Clothes in Beatson and

Friedmann (eds), Good Faith and Fault in Contract Law (Oxford: Oxford University Press,
1995) 123.

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 112 Formation

drawn between the content of practical benet to the promisor (avoid-

ing the consequences of breach) which points towards enforcement
and the promisor having no practicable alternative but to agree (to
avoid the consequences of breach) which points against enforcement.
However, there is nothing for it but to engage with the task of mark-
ing out the appropriate shape of economic duress. Sufce it to say that
since scarcity is pervasive, all choices are constrained. It is impossible
to generate a coherent theory of duress by reference to the internal
psychology of the parties. To distinguish acceptable constraints from
the unacceptable, we will need to appeal to factors external to the will
of the parties.
The consideration doctrine cannot be replaced by the vitiating fac-
tors of duress, undue inuence, and unconscionability. Consideration
is not merely a proxy for serious intention to be bound, and despite the
justicatory language of the courts, the vitiating factors do not concern
the negation of this serious intention.

6. conclusion

Evolution, not revolution, has always been the common law way. Lord
Steyns extra-judicial comment is exemplary:131
I have no radical proposals for the wholesale review of the doctrine of
consideration. I am not persuaded that it is necessary. And great legal
change should only be embarked on when they are truly necessary.... [T]
he courts have shown a readiness to hold that the rigidity of the doctrine
of consideration must yield to practical justice and the needs of modern
commerce.
The story of the pre-existing duties problem is partly one of the rich-
ness, ingenuity, and evolutionary capacity of the common law to
overcome obstacles to reaching just and sensible results. Faced with
the perceived obstacle of consideration, Williams v Roffey widened its
scope; Collier v Wright circumvented it, and Antons Trawling and Gay
v Loh abolished it. The three approaches are interconnected; there is
an order of priority in their application. Expansion of consideration
reduces the need to resort to circumvention via promissory estop-
pel. But abolition of consideration makes the expansion of consider-
ation or of promissory estoppel redundant. Consideration bites before
promissory estoppel, but abolition swallows all.

131 Contract Law: Fullling the Reasonable Expectations of Honest Men (1997) 113 LQR

433, 437.

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 Consideration and Contract Modifications 113

At the end of the day, the desirable approach to pursue depends

on our regard for the doctrine of consideration. The crux of this essay
is that enforcement of one-sided modications can be accommodated
within the traditional framework by further renement of the enlarge-
ment of consideration recognized in Williams v Roffey. To one who
promises more for performance already owed, receipt of that perfor-
mance is superior to the right to sue for it and she should be able to bar-
gain for it. This can be understood in terms of a unilateral offer which
becomes binding only if the stipulated performance is rendered. The
logic should be extended to relieving promises. The concern to prevent
exploitation must be worked out at stage two, under the rubric of eco-
nomic duress. A coherent resolution of the problem of one-sided modi-
cations eliminates one of the major causes for discontent with the
consideration doctrine. This should inform the debate over whether
the consideration doctrine should be sustained and rehabilitated or be
dismantled wholesale by legislation, or piece by piece in the courts.
A bird in the hand is better than one in the bush. The Emperor who
is merely given a repromise of new clothes gets nothing more than he
had before; he may still end up naked. But the Emperor who actually
gets his new clothes receives something more than he had before. The
eye of the law may not see it, but the Emperor, facing a state occasion,
will have no doubt.

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