Stilk v Myrick

Facts[edit]
Stilk was contracted to work on a ship owned by Myrick for 5 a month, promising to do anything needed [2] in the voyage regardless of emergencies. After the ship docked at Cronstadt two men deserted, and after failing to find replacements the captain promised the crew the wages of those two men divided between them if they fulfilled the duties of the missing crewmen as well as their own. After arriving at their [2] home port the captain refused to pay the crew the money he had promised to them. The defense, represented by Garrow, argued that the agreement between the captain and the sailors was contrary to public policy, and utterly void. In West India voyages, crews are often thinned greatly by death and desertion; and if a promise of advanced wages were valid, exorbitant claims would be set up on all such occasions. This ground was strongly taken by Lord Kenyon in Harris v Watson, Peak. Cas. 72, where that learned Judge held, that no action would lie at the suit of a sailor on a promise of a captain to pay him extra wages, in consideration of his doing more than the ordinary share of duty in navigating the ship; and his Lordship said, that if such a promise could be enforced, sailors would in many cases suffer a ship to sink unless the captain would accede to any extravagant demand they might think proper to make.
[3]

The lawyers for the plaintiff attempted to distinguish this case from Harris v Watson by pointing out that the circumstances were completely different, and that the captain had offered the extra money without any pressure being brought to bear by the crewmen Facts: Stilk (P) was to be paid 5 pounds per month during a voyage at sea. Two seamen deserted and the Captain agreed that the wages of the two deserters would be divided equally among the remaining hands if the two seamen could not be replaced at Gottenburgh. Myrick (D) refused to honor the agreement and Stilk sued. Issue: May a contract for services be modified without consideration? Holding and Rule: No. A contract for services may not be modified without consideration. The court held that under these facts, the seamen who remained with the ship had the obligation to do all that they could under all emergencies during the voyage. They had sold all of their services until the voyage was completed. The agreement would have been proper if the seamen had had the liberty to depart sooner and chose to remain on the voyage longer in exchange for greater compensation. The court held that a desertion is considered to be an emergency the same as a death among the crew. The court found in favor of D on the grounds that there were not changed circumstances sufficient to compel a change in the contract. Disposition: For D; Ps recovery limited to 5 pounds per month.

Williams v Roffey Bros & Nicholls

Facts
Roffey Bros. was contracted by Shepherds Bush Housing Association to refurbish 27 flats in London. They subcontracted carpentry to Lester Williams for 20,000 payable in instalments. Some work was done and 16,200 was paid at which point Williams ran into financial difficulty as the price was too low. Roffey Bros. was going to be liable under a penalty clause for late completion, so they had a meeting on 9 April 1986 and promised an extra 575 per flat for on time completion. Williams did eight flats and stopped because he had only received 1,500. New carpenters were brought in to complete the work and Williams claimed. He was awarded 3,500 at the lower court, which was appealed by Roffey Bros.

Issue
Is there sufficient consideration for the increased amount for on time completion?

Decision
Appeal dismissed.

Reasons
Glidewell held Williams had provided good consideration even though he was merely performing a preexisting duty. The test for understanding whether a contract could legitimately be varied was set out as follows: A has a contract with B for work Before it is done, A has reason to believe B may not be able to complete A promises B more to finish on time A "obtains in practice a benefit, or obviates a disbenefit" from giving the promise There must be no economic duress or fraud The practical benefit of timely completion, even though a pre-existing duty is performed, constitutes good consideration. He dismissed Stilk v Myrick saying It is not in my view surprising that a principle enunciated in relation to the rigours of seafaring life during the Napoleonic wars should be subjected during the succeeding 180 years to a process of refinement and limitation in its application to the present day.

Re McArdle (1951) Ch 669 Court of Appeal Majorie McArdle carried out certain improvements and repairs on a bungalow. The bungalow formed part of the estate of her husband's father who had died leaving the property to his wife for life and then on trust for Majorie's husband and his four siblings. After the work had been carried out the brothers and sisters signed a document stating in consideration of you carrying out the repairs we agree that the executors pay you 480 from the proceeds of sale. However, the payment was never made. Held: The promise to make payment came after the consideration had been performed therefore the promise to make payment was not binding. Past consideration is not valid.

Balfour v Balfour
Facts
Mr. Balfour and his wife went to England for a vacation, and his wife became ill and needed medical attention. They made an agreement that Mrs. Balfour was to remain behind in England when the husband returned to Ceylon (Sri Lanka) and that Mr. Balfour would pay her 30 a month until she returned. This understanding was made while their relationship was fine; however the relationship later soured. The lower court found that there was sufficient consideration in the consent of Mrs. Balfour and thus found the contract binding, which Mr. Balfour appealed.

Issue
Was Mr. Balfour's offer intended to be legally binding? Does the fact that they were husband and wife matter?

Decision
Appeal allowed.

Reasons

Atkin held that the law of contracts is not made for personal family relationships. As there was no intent to be legally bound when the agreement was agreed upon, there can be no legally binding contract. Atkin holds that if the courts were to allow all wives to come to court when agreements had been broken with their husbands then the courts would be overrun with frivolous cases. Warrington, concurring in the result, agreed substantially with Atkin, but added that there was no bargain of any kind made by Mrs. Balfour sufficient for a binding contract.

Ratio
Arrangements made between husbands and wives are not generally contracts as the parties do not intend to be legally bound by the agreements .

Merritt v Merritt [1970] 1 WLR 1211 Court of Appeal

A husband left his wife and went to live with another woman. There was 180 left owing on the house which was jointly owned by the couple. The husband signed an agreement whereby he would pay the wife 40 per month to enable her to meet the mortgage payments and if she paid all the charges in connection with the mortgage until it was paid off he would transfer his share of the house to her. When the mortgage was fully paid she brought an action for a declaration that the house belonged to her. Held: The agreement was binding. The Court of Appeal distinguished the case of Balfour v Balfour on the grounds that the parties were separated. Where spouses have separated it is generally considered that they do intend to be bound by their agreements. The written agreement signed was further evidence of an intention to be bound

Esso Petroleum v Customs & Excise [1976] 1 WLR 1 House of Lords Esso ran a promotion whereby any person purchasing four gallons of petrol would get a free coin from their World Cup Coins Collection. The question for the court was whether these coins were 'produced in quantity for general resale' if so they would be subject to tax and Esso would be liable to pay 200,000. Esso argued that the coins were simply a free gift and the promotion was not intended to have legal effect and also that there was no resale. Held: 3:2 There was an intention to create legal relations. The coins were offered in a commercial context which raised a presumption that they did intend to be bound. However, the coins were not exchanged for a money consideration and therefore the coins were not for resale. Scammell and Nephew v Ouston [1941] AC 251 House of Lords The parties entered an agreement whereby Scammell were to supply a van for 286 on HP terms over 2 years and Ouston was to trade in his old van for 100. There was then some disagreement and Scammel refused to supply the van. Held: There was no certainty as to the terms of the agreement. Whilst there was agreement on the price there was nothing in relation to the HP terms stating whether it would be weekly or monthly instalments or how much the instalments would be.