LECTURE 9 - CONTRACT, VARIATION OF CONTRACTS - 19/11/19 Variation of Contracts (ie changing the terms/obligations) - Need for Agreement (offer plus acceptance). - Need for Consideration. - Particularly as it relates to the performance of existing contractual obligations to the same party ... - Stilk v Myrick (1809) - Hartley v Ponsonby (1857) - Williams v Roffey Bros (1990) - Supply of goods and services- a new promise which varies the contract when the promisee is only performing an existing obligation is binding on the promisor if the promisor receives a 'practical benefit' (Williams v Roffey Bros). - 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), what is position of the law? Part Payment of Debts - Can a promise to accept less than is owed in order to extinguish a debt be enforceable? - Example o Bill is owed £2000 by Andy. o 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? " Andy has varied contract, can this stand? Common Law Position - 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 (even if party promises not to chase after it). However, o Early part payment at the request of the creditor o Payment on the due date but at a different location from the one specified in the contract - changing location is consideration o Provision of goods or services instead of money o Something additional offered - "the gift of a horse, hawk, 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 (still authority on part payment of debts, not overruled) - Entrenchment of common law principle. - 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 (accept less than she was owed), 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