Home | Cases | Foakes v Beer

 

Key information

Court
Court of Appeal, England

Issues
Consideration
Part payment of a debt

AustraliaFoakes v Beer

(1884) 9 App Cas 605

 

Facts

Beer obtained a judgement against Foakes for a debt owed and costs in 1875.  Over a year later the parties entered into an agreement to the effect that in consideration of Foakes paying Beer $500 in part satisfaction of the judgement debt and on condition that the balance be paid in instalments, Beer would not take proceedings on the judgement.  In 1882 Beer took proceedings to enforce the judgement so as to recover interest on the judgement debt. It was established that the whole debt had now been paid off.

Issue

Was Beer prevented by the agreement from enforcing the judgement?

Earl of Selborne LC

(1) The agreement could only be enforced if there was consideration.

(2) The only consideration expressed was the payment of $500 – which was part of a larger debt already due. The payment of instalments could not be consideration unless payment of the $500 was consideration

(3) The doctrine of Pinnels case is that payment of a lesser sum on the day cannot be satisfaction for the whole sum. i.e.  payment of a lesser sum on the day cannot be good consideration for a promise by the creditor not to claim  the rest of the money due.

This rule is still the law and therefore there was no consideration provided here. As a result Beer could recover the interest.

Point

Part payment of a debt on or after the date the debt is due is not good consideration for the creditors promise not to claim the balance.

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