Contract Law - Lecture 9 Variation of Contracts, Part-payment, Absence of Consideration and Promissory Estoppel Variation of Contracts (e.g. changing terms) · Need for Agreement (offer plus acceptance). · Need for Consideration (Murrie v Misa) . Particularly as it relates to the performance of existing contractual obligations to the same party ... o Stilk v Myrick (1809) - if you do what you were originally meant to do there is no consideration - starting point o Hartley v Ponsonby (1857) - if you go an extra step to your obligation then this may be consideration o Williams v Roffey Bros (1990) - if there is practical benefit and no duress then this will be consideration o Issue for the law is you can only enforce an agreement that you have provided consideration for . 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). . Practical benefit - consideration where this is done in return for money . 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. o Bill accepts and promises not to try to recover the remaining £500. o Is Bill (the promisor) bound by this promise? o Can Bill wake up the next morning and demand Andy pays the rest of the debt? Common Law Position Pinnel's Case (1602) - starting point in law for part-payment of debt . Part payment of a debt on the date on which it is due can never be satisfaction for the full amount owed. 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 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) - hasn't been overruled 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