The answer should demonstrate understanding of the FIRAC method and its application to resolve disputes.

Question

1. Read the following cases and then using the critical legal analysis approaches, state what would be the legal position of the involved parties; i.e., whether they will succeed in their claims or not. The specific questions you should address are mentioned at the end of each case.

A company which deals in gold and jewelry employs two private security guards to guard the premises each night. The security guards are both self-employed, as the company feels that it is safer to employ people who do not work for the same organization. One night, one of the security guards phones in to say that he will not be able to work for the rest of the week, as he is ill. The company tells the other security guard that he must work single-handed for the remainder of the week. The security guard manages to do this, although it involves a certain amount of extra work. At the end of the week the company tells the security guard who worked alone that he will be paid double wages for the week. Now the company has changed its mind and pays the guard only his normal amount. Advise the security guard as to whether or not he will be entitled to the extra amount promised.

Answer 1

1. F (Facts)

First, you must isolate the material facts. These are the only facts necessary to resolve the legal issue.

1. A self-employed security guard (G) is employed by a company (C).
2. G's colleague (G2) is unable to work.
3. C instructs G to work single-handed for the week.
4. G completes the week of single-handed work. The work involves "extra" effort.
5. After the work is completed, C tells G he will be paid double wages.
6. C later changes its mind and refuses to pay the extra amount.

2. I (Issue)

Second, you must state the central legal issue. The issue is the single, precise question the analysis must answer.

1. Is the company’s promise to pay double wages, made after the guard had already completed the work, a legally enforceable contract?
2. More precisely, did the security guard provide valid consideration for the company's promise of a bonus?

3. R (Rule)

Third, you must state the relevant legal rules or principles.

1. Contract Formation: A binding contract requires three elements: offer, acceptance, and consideration.
2. Consideration: Consideration is the "price of the promise." It is some benefit, right, or interest accruing to the promisor, or some forbearance, detriment, or loss undertaken by the promisee.
3. Past Consideration: A promise made in return for an act that has already been performed is unenforceable. This is past consideration, which is not valid consideration. The act was not done in exchange for the promise. The leading case is Roscorla v Thomas (1842).
4. Existing Contractual Duty: Performing an act which one is already bound to do under an existing contract is not valid consideration for a new promise from the other party. The leading case is Stilk v Myrick (1809).
5. Exception (Practical Benefit): A promise to pay more for an existing duty can be enforceable if the promisor receives a "practical benefit" (or avoids a "disbenefit"), and the promise was not made under economic duress. The leading case is Williams v Roffey Bros. & Nicholls (Contractors) Ltd (1991).

4. A (Application)

Fourth, you must apply the rules to the facts. This is the main body of your analysis.

1. The company is the promisor. It made a promise to pay double. The security guard is the promisee. He seeks to enforce that promise.
2. The enforceability of this promise depends entirely on when the act (working alone) was performed in relation to when the promise (double pay) was made.
3. The facts are explicit. The company told the guard he would be paid double wages "at the end of the week."
4. The guard's work—working single-handed and performing "extra work"—was already finished. He completed the act before the company ever promised the bonus.
5. This is a textbook example of past consideration. The guard's work was not done in reliance on or in exchange for the promise of double pay. The promise was a mere gratuity. It was a "naked promise" (nudum pactum) made in gratitude for a past performance.
6. Applying Roscorla v Thomas, the past service of the guard is not legally sufficient consideration to bind the company to its new promise.

Addressing the Counter-Arguments:

You must also show why the Williams v Roffey "practical benefit" rule does not apply.

1. The guard might argue that the company received a clear practical benefit. They avoided the disbenefit of having an unsecured jewelry shop. This is true.
2. However, the Williams v Roffey exception only applies to modify an existing duty before it is performed. It validates a promise to pay more in order to ensure the promisee completes the work.
3. Here, the work was already done. The company was not promising extra pay to ensure the guard stayed for the week. It was promising extra pay because he had already stayed. The "practical benefit" rule cannot save a promise that is supported only by past consideration.

5. C (Conclusion)

Finally, you must provide a clear and decisive conclusion.

1. The security guard will not be entitled to the extra amount promised.
2. The promise of double wages is legally unenforceable. It was made after the consideration (the work) had already been performed. This is past consideration, which is not valid consideration in the law of contract.