Foakes v Beer (1883) LR 9 App Cas 605
Whether part payment of a debt is consideration.
The respondent, Beer, loaned the appellant, Dr Foakes, £2090 19s. When he was unable to repay this loan she received a judgment in her favour to recover this amount. The pair then entered an agreement whereby ‘in consideration’ of an initial payment of £500 and ‘on condition’ of six-monthly payments of £250 until the whole amount was repaid, she would not enforce her judgment against him. Foakes made these regular payments until the entire amount was repaid. However, he had not paid any interest on the judgement debt, which Beer was entitled to under statute. This interest totalled £302 19s 6d.
The respondent’s case was that the promise not to enforce the judgement was not supported by good consideration because the appellant had only done what he was already contractually bound to do. The respondent relied on the rule in Pinnel’s Case (1602) 5 Co Rep 117 that part payment of a debt could not be satisfaction of the whole.
The House of Lords held that the respondent’s promise not to enforce the judgment was not binding as Dr Foakes had not provided any consideration. Their Lordships approved the rule in Pinnel’s Case. Lord Selborne said that there had to be
‘some independent benefit, actual of contingent, of a kind which might in law be a good and valuable consideration’.
However, Lord Blackburn expressed some dissatisfaction with this, noting that by accepting less a creditor could in some cases gain a practical benefit.
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