Abstract:
There was a fair amount of excitement among contract law scholars in early 2018 when the Supreme Court heard the case of Rock Advertising Ltd v MWB Business Exchange Centres Ltd. In fact, excitement levels were heightened further than usual because the Supreme Court was faced with not one, but two ‘truly fundamental issues in the law of contract’. These two fundamental issues were extremely important to the formation of variation contracts. First, the Supreme Court had an opportunity to accept or reject Williams v Roffey Bros & Nicholls (Contractors) Ltd and its ‘practical benefit test’ for consideration (something that no final court of appeal in the common law world had yet done), and could determine whether Foakes v Beer still governed part-payment of debt cases in England. Secondly, the Supreme Court was also faced with argument about the efficacy of ‘no oral modification’ clauses in written contracts. Ultimately however, at least half of this excitement was left unfulfilled. The Supreme Court’s decision focused almost entirely on the ‘no oral modification’ clause and left the consideration point for another day. In light of the Supreme Court’s decision, this piece will examine the state of the law relating to the consideration needed to support an agreement to accept part payment of a debt in satisfaction of the whole. Since the Supreme Court did not comment substantively on this point, where does that leave Foakes v Beer? Is it still binding authority? Or has the Court of Appeal’s decision in the MWB litigation on this point fatally undermined it?
