#19862 - A Simple Guide To Consideration Following Mwb V Rock - Contract Law

(i)

Where B owed A 12k and A promises not to sue for it if B pays 3k upfront, even after MWB v Rock there is no consideration for the promise: Foakes v Beer. A is not estopped from going back on the promise unless B has somehow acted in reliance on the promise.

(ii)

Where B owes A 12k and A agrees if B pays 3k upfront then 750/month for the next 12 months, and then B immediately sues for the full amount, there is now an issue. Here is the process:

1. Given Foakes v Beer, can the payment plan count as consideration?
   Williams v Roffey Bros indicates it can if it amounts to a practical benefit. Peter Gibson LJ declined to apply Williams in Re Selectmove (CA), indicating Foakes was still good authority for the proposition that part payment or a payment plan is not good consideration for a promise not to sue for the full amount. However, the Court of Appeal in MWB v Rock Advertising seemed to indicate otherwise, holding a practical benefit could be consideration for such a promise.

2. If the answer to (a) is yes, does the payment plan amount to a practical benefit?
   As McBride points out, if A goes back on his promise extremely quickly it seems unlikely B has received any practical benefit. As per Lord Sumption’s dicta in the UKSC MWB v Rock, the practical benefit in that case was either that the prospect of full payment was more likely because of the payment plan, or the fact that MWB would be less likely to have premises vacant whilst they looked for a new licencee. The CA in that case pointed to the continuation of the MWB-Rock relationship as a benefit, but as that relationship broke down shortly afterwards. So perhaps they meant the chance of the relationship continuing would be enough.

3. If the answer to (a) is no, is A estopped from going back on her promise?
   Likely not as paying part of the amount owed is not enough for reliance: MWB v Rock (CA) (contradicting Arden LJ in Collier v Wright – also CA. Arden LJ was also in MWB v Rock and attempted to argue there was no inconsistency on the estoppel point between Collier and MWB, but McBride rightly points out Collier has been de facto by MWB). B must have somehow relied on the promise in another way.

Decreasing...