Ratio Decidendi
A promise to pay an existing debt by instalments is not supported by consideration, following the rule in Foakes v Beer. The practical benefit approach from Williams v Roffey Bros does not extend to promises to pay existing debts.
Facts
A company offered to pay its outstanding tax debts to the Inland Revenue by instalments. It later argued this arrangement was a binding contract.
Judgment Summary
The Court of Appeal held there was no consideration for the Revenue's promise to accept instalments. Peter Gibson LJ held that extending Williams v Roffey to part-payment of debts would conflict with Foakes v Beer, which only the House of Lords could overrule.
Key Quotes
"If the principle in Williams v Roffey Bros were extended to an obligation to make payment, it would leave the principle in Foakes v Beer without any application."
— Peter Gibson LJ
Subsequent Treatment
Confirms that the practical benefit approach does not apply to part-payment of debts.