Variation of Contracts, Part-payment, Absence of Consideration and Promissory Estoppel Variation of Contracts (i.e. changing the terms/obligations) · Need for agreement (offer plus acceptance) also need for consideration particularly as is relates to the performance of existing contractual obligations to the same party .- Stilk v Myrick (1809) . Williams v Roffey Bros (1990) providing a practical benefit to enforce a promise to pay extra. Supply of goods and services- a new promise which varies (i.e. changes) the contractual terms when the promise is only performing an existing obligation is binding on the promisor if the promisor receives a 'practical benefit'. Part payment of debts · However, in relation to debts owed, and paying a different sum (which is in effect a variation of the original contract to pay a certain amount), Can a promise to accept less than is owed in order to extinguish a debt be enforceable? Example: · Bill is owed £2000 by Andy. · Andy offers to pay £1500 - says he cannot afford any more. . Bill accepts, and promises not to try to recover the remaining £500. · Is Bill (the promisor) bound by this promise? · Pinnel's Case (1602) · 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 the one specified in the contract · Provision of goods or services instead of money . Something additional offered - "the gift of a horse, hawk, and robe" will amount to consideration if acceptable to creditor. . 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 instalment (i.e. delayed) payments. . The House of Lords confirmed that she was entitled to recover the interest and any promise to accept less than she was owed was not binding. . 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 (i.e. paying by instalments) could not in itself extinguish the entire debt (i.e. entire amount plus interest). · This principle has been confirmed in other cases- Re Selectmove [1995] . A company argued that it had made a binding contract with the Inland Revenue to pay its tax by installments. . The Inland Revenue argued that this agreement was not binding on them because the company provided no consideration. · The company was