“Williams v Roffey limited: does not apply to part payment of debts.”
The Court of Appeal held that Williams v Roffey did not extend to part payment of debts. The Revenue's petition succeeded.
Selectmove owed substantial tax to the Inland Revenue. They agreed a payment arrangement but the Revenue later demanded full payment and issued a winding-up petition. Selectmove argued the arrangement was binding.
Whether the principle in Williams v Roffey applied to enable part payment of an existing debt to constitute good consideration for a promise not to enforce the full debt.
The court distinguished Williams v Roffey, stating it concerned existing contractual duties owed to the same party, not payment of debts. The rule in Pinnel's Case and Foakes v Beer remained applicable to debt situations.
This case limits the scope of Williams v Roffey and confirms that traditional rules about part payment of debts remain unchanged. It maintains the distinction between contract variation and debt settlement.
The practical benefit principle from Williams v Roffey does not apply to part payment of existing debts.
The payment arrangement with the tax authority was not binding and the winding-up petition could proceed.
It limits Williams v Roffey and preserves traditional rules about part payment of debts under Pinnel's Case.
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Try the free SQE1 diagnosticPeter Gibson LJ suggested that only the House of Lords could decide whether Williams v Roffey should extend to debt cases.
OSCOLA Citation
Re Selectmove Ltd [1995] 1 WLR 474 (CA)
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[2026] UKSC 1
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