The Pre-Existing Duty Rule in Contract Law: A Historical Analysis and Recent Developments, Summaries of Law

Download The Pre-Existing Duty Rule in Contract Law: A Historical Analysis and Recent Developments and more Summaries Law in PDF only on Docsity! TAB 4 25th East Region Solicitors Conference Fairmont Le Château Montebello Friday, May 3 – Saturday, May 4, 2019 “The Rule in Stilk v Myrick is Alive but Unwell” The Current State of the Law Regarding the Pre-Existing Duty Rule Kim Do & Imroz Aliz, Students, University of Ottawa, Faculty of Common Law 20 19 C an LI ID oc s 38 92 1 “THE RULE IN STILK v MYRICK IS ALIVE BUT UNWELL” The Current State of the Law Regarding the Pre-Existing Duty Rule Imroz Ali and Kim Do (Students – University of Ottawa, Faculty of Law) Introduction When a party seeks to vary the terms of an existing contract, they are subject to the pre- existing duty rule. This rule requires that in order to vary a contract, fresh consideration must be provided. This paper will focus on the pre-existing duty rule, which has caused uncertainty and inconsistency in the common law all the way from when it originated in the 1800’s to its recent developments in Canadian case law in 2018. This paper will outline the origins of the rule and how it has been treated in the common law world. Further, this paper will focus on the rule's treatment in Canada and its current state in Ontario. The Origin of the Pre-Existing Duty Rule In the early 1800’s, a seminal case from the Court of King’s Bench established a common law rule, which still applies in some jurisdictions today including Ontario. Lord Ellenborough in the case of Stilk v Myrick1, held that a promise made by a captain to vary a contract with his crew was void for want of consideration because in exchange for the promise, the captain received services from the crew which already had a pre-existing contractual duty to perform.2 The rule from Stilk v Myrick is the pre-existing duty rule: an already established contractual duty does not constitute consideration for a variation in a contract. For a contractual variance to be enforceable, it is necessary to have fresh consideration. Nearly two hundred years later, the United Kingdom moved away from its strict consideration approach in Stilk v Myrick in the case of Williams v Roffey Bros & Nicholls (Contractors) Ltd (1989).3 The court in Williams ruled that a pre-existing contractual duty can constitute consideration where the promisor receives a practical benefit from the promisee. 1 170 ER 1168, 2 Camp 317, [1809] EWHC J58 (Eng KB) [Stilk v Myrick]. 2 Ibid at para 43. 3 [1991] 1 QB 1, [1990] 1 All ER 512 (Eng CA) [Williams]. 20 19 C an LI ID oc s 38 92