Common Law: Pinnel's Case Of Foakes V Beer

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Pinnel's Rule Under common law, the payment of a lesser sum cannot be considered to satisfy a greater sum. Hence, the part payment of a sum due in a particular contract cannot be interpreted as a total satisfaction of the amount due even if both of the parties in the specific contract have come to an agreement to this, except where new or more consideration is being provided. This is because the part payment is merely what the promisor is under obligation to do under the contract, and it cannot become consideration for an agreement between the parties of a contract to relinquish the balance of the amount due. In Pinnel's Case (1602) 77 ER, 237, Pinnel brought an action against Cole to recover the amount due that was owing by Cole. As a…show more content…
These different forms constitue valid consideration for the promise to relinquish the greater debt owed. The rule in Pinnel's Case was applicable in the case of Foakes v Beer (1884) 9 App Cas 605, HL, where in this case, Dr Foakes owed Mrs Beer $2,000. Mrs Beer had taken out a judgment against Dr Foakes. Mrs Beer agreed that if Dr Foakes paid her $500 in cash and the rest of the amount due in instalments, she would not impose the judgment debt. Dr Foakes paid the sum as agreed, which was $500 and the rest of the money in instalments, but Mrs Beer later calimed the interest on the judgment debt. In his defence, Dr Foakes contended that he had followed through with the agreement with Mrs Beer that the amount due would be relinquished if he paid $500 in cash and the rest of the debt in instalments. The House of Lords applied the Pinnel's rule and Mrs Beer was given judgment for the interest which amounted to $360. Earl of Selbourne LC held…show more content…
On the other hand it was held by the Court of Appeal in Bidder v Bridges (1887) 37 Ch D 406, that though the payment of a smaller sum cannot be a good consideration for accord and satisfaction of a claim for a larger one, yet if there is anything which can be a new consideration and a new benefit to the person entitled to the larger sum, that would support accord and satisfaction. A cheque given by a third party for a smaller sum in satisfaction of a claim for a larger sum was held to be a complete satisfaction of the debt. ... The facts of the present case clearly come within that principle. Here there was a cheque given by the third party in full settlement of the total indebtedness of the

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