Assi v Dina Foods Ltd

A promise to pay a bonus made after the promised performance has been fully completed is gratuitous and unenforceable for want of consideration. The practical-benefit principle recognised in Williams v Roffey Bros & Nicholls (Contractors) Ltd does not assist where the promisee has already performed the relevant obligation and cannot rely on the promise to provide any further benefit. Claims for contractual commission also require proof of the alleged agreement; contemporaneous employment records, conduct and reliable evidence may decisively disprove an asserted oral term.

The claimant, a former national sales manager employed by the defendant, claimed unpaid commission calculated at 10 per cent of sales and a £4,000 bonus allegedly promised after he secured a major Waitrose order.

The trial concerned liability only. The court determined whether the commission term existed and whether the bonus promise was enforceable, given that the Waitrose deal had already been concluded when the promise was made.

1. Commission. The court rejected the alleged oral agreement to pay 10 per cent commission. The employment records, payslips, tax documents, correspondence concerning JobSeeker’s Allowance, resignation letter and full-and-final settlement document contained no reference to commission. They were inconsistent with the claimed entitlement. The claimant’s evidence was also materially unreliable, including because he had drafted statements for other witnesses and had attempted to procure false supporting evidence. The commission claim therefore failed in its entirety.
2. Bonus promise. The court accepted that the defendant’s managing director promised to pay £4,000 after the Waitrose deal had been completed. Nothing remained for the claimant to do to secure the deal. The promise consequently provided no benefit to the defendant and was unsupported by consideration. It was a gratuitous promise and unenforceable.
3. The court considered Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1. That decision did not assist because it concerned a promise made before contractual performance was complete, where the promisor obtained a practical advantage from the promisee’s continuing performance. It did not make a gratuitous promise made after performance complete enforceable.
4. Both claims were dismissed.