Should the practical benefit principle extend to contract formation?

Abstract

In 2012 the Federal Government commenced a comprehensive review of the Australian law of contract, with the aim of identifying those aspects of this legal framework which were not conducive to its efficient and effective operation for businesses and consumers. This article seeks to add to this live discussion by contemplating whether the highly controversial practical benefit principle, famously expressed by the English Court of Appeal in Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1, should apply not only to contract variations but also to contract formation. It is argued on three grounds that, if the principle remains an established feature of the doctrine of consideration in this jurisdiction, the principle should not be extended in this manner as this will only give rise to issues of the kind being targeted in the government's review.