Promissory Estoppel 1 Variation of Contracts Need for Agreement (offer plus acceptance). Need for Consideration(particularly as it relates to existing contractual obligations to the same party). ? Stilk v Myrick (1809) ? Hartley v Ponsonby (1857) ? Williams v Roffey Bros (1990) OR Equitable waiver - promissory estoppel. Part Payment of Debts Can a promise to accept less than is owed in order to cancel a debt be enforceable? Example · Ais owed£2000 by B. . B offers £1500 - says she cannot afford any more · A accepts, and promises not to try to recover the remaining £500. ? Is A bound by this promise? A Pinnel's Case (1602) Common Law Position Part payment of a debt on the date on which it is due can never be satisfaction for the full amount owed. However, . Early part payment at the request of the creditor . Payment on the due date but at a different location from that specified in the contract ? Provision of goods or services instead of money ? Something additional offered - "the gift of a horse, hawk, robe" will amount to consideration if acceptable to creditor. Common law contd. The rule in Pinnels's Case was obiter, because the debtor in that case had actually paid early and had therefore provided sufficient consideration to discharge the entire debt. However, this rule/principle as regards part payment of debts was confirmed by the House of Lords in Foakes v Beer (1884). > Foakes v Beer Dr Foakes owed money to Mrs Beer. Mrs Beer agreed to accept payment by instalments. At end of the instalment payments, Mrs Beer claimed the interest on the debt, because of the delayed payment. The House of Lords confirmed that she was entitled to recover and any promise to accept less was not binding. Foakes v Beer contd.
Even if Mrs Beer had promised not to demand the interest, that promise was unenforceable because Dr Foakes provided no consideration for it. So the part payment (ie paying by instalments) could not in itself extinguish the debt. This principle has been confirmed in other cases- Re Selectmove [1995]; Ferguson v Davies [1997] Common law exceptions Payment by a third party ? A owes B £2000. C agrees to pay B £1500 in return for B's promise not to sue A for the remainder of the debt. B's promise is enforceable. · Hirachand Punamchand v Temple (1911) Composition agreement between several creditors of one debtor. . Good v Cheesman (1831) Practical Benefit? Williams v Roffey Bros .- if 'practical benefit' is provided, then that will amount to sufficient consideration for the enforcement of a new promise, even when there was an existing obligation to the same party. Rejected in Re Selectmove The principle as it relates to 'practical benefit' does not apply to part payment of debts. It is only applicable if the issue is as regards the provision of goods and services. Variation of Contracts without Consideration The principle in Foakes v Beer