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Hi, I am struggling to understand the question below taken from the ACCA study hub:
In January, Ami took over an old warehouse with the intention of opening an art gallery. As the warehouse had to be converted, Ami entered into a contract with Cis to do all the necessary painting. Cis was to be paid £5,000. Cis received an initial payment of £1,000 and agreed to have the work completed by 31 March.
At the end of February, Cis told Ami that she would not complete the work in time unless Ami agreed to increase her payment by a further £1,000. Ami agreed to ensure that the job was done on time.
On completion of the work on time, Ami refused to make the additional payment to Cis, beyond the original contractual price.
Q1. Indicate which, of the following are past consideration and which are not.
Ami’s initial payment of £1,000 – Answer: Past consideration
Cis’s initial agreement to complete the work by 31 March – Answer: Past consideration
The work that had been done by Cis at the end of February – Answer: Past consideration
Ami’s agreement to pay the further £1,000 – Answer: Not past considerationQ2. Which of the following statements explains whether Cis can enforce Ami’s agreement to pay an extra £1,000?
A: Cis cannot enforce the further payment because she did not give good consideration for it
Maybe check out the case Williams v Roffey.
Here’s a link:
https://www.lawteacher.net/cases/williams-v-roffey.php
If you still have an issue, post again on this forum
OK?
Hi, thanks this helps me understand that there was no good consideration for the extra payment as Cis was just carrying out the normal contract he was bound to in the first place with nothing additional.
For the first question, I’m can’t seem to understand why the first 3 are past consideration, as to me these were done at the time or after the contract was made, not before.
Hi. Just be aware that with Williams v Roffey, the promise of an additional amount payable WAS enforceable. The reason being that the sub-contractor DID give consideration. That consideration was in the form of protecting the other party from facing penalty charges for late completion.
Now, back to Ami and Cis. Consider the timing of this legal action. Deposit has been paid, price and timing for the work has been agreed, work up to the end of February has been completed. All of these represent ‘water under the bridge’. They’ve gone. They’re history. Now we are facing a dispute about an apparent promise to pay a further amount.
When Ami agreed to pay an additional amount, what did Cis give in return? From my reading of the question, the answer has to be ‘nothing’. Going back to Williams v Roffey, Roffey says ‘You’ve got to finish – otherwise I’m facing the prospect of having to make penalty payments’. Putting in the extra work to finish on time saved Williams from having to make those penalty payments … and THAT was good consideration. Therefore the additional sum was payable.
But we don’t have any equivalent in Ami v Cis. No additional consideration. So additional amount is NOT payable.
You write ‘I’m can’t seem to understand why the first 3 are past consideration, as to me these were done at the time or after the contract was made, not before.’
Agreed. But what we are arguing about now is the payability of the additional sum. So all that happened before the end of February is past.
Is that better?
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