sh = shillings
Consideration: Pt. 2
8. Part payment of a debt
General Rule: Part payment of a debt cannot be
good consideration for the full debt.
The creditor will still be able to recover the
balance of the debt unless the debtor can she
that some consideration was supplied in return
for the agmt to take the lesser sum.
Consideration can include:
- Earlier payment
- More convenient place
- Good goods/services
Pinnels Case.
18 Oct: Cole borrowed money which was to be
paid in full. He agreed to pay but did not want to
pay the full 8 pound 50 to Pinnel.
1 Nov: Cole returned Pinnel 5 pound 50 and he
accepted the money as full amount. However,
he went and sue Cole for the full amount.
Held: It was not good consideration. However if
the payment is made at an earlier date
(supposedly 1 Nov) /diff place (if the debtor
travels to the creditors place) /with goods,
then it is good consideration.
Foakes v Beer
- Foakes owed Beer money and he paid it off in
instalments to which Mrs Beer agreed to
accept.
- However, Beer sued Foakes for interest as
Foakes delayed the full payment. She claimed
that she is not claiming the balance of the
part payment but for interest.
Held: Beer won.
Ratio: HoL held that even if Beer promised to
forgo the interest, it was an unenforceable
promise because Foakes provided no
consideration for it.
Re Selectmove
- An England revenue tax collector met up with
D to settle taxes.
- The rep told him that there is a large amount
to be paid by a lump sum and periodically.
- D paid the lump sum and the taxes
periodically. At the 6th month, the P
petitioned for the company to be wound up
due to insolvency.
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Held + Ratio: Is the part payment good
consideration? No. What had been paid was far
lesser than the real amount. The tax collected
did not have the authority to make the decision.
As the P did not reply D about the method of
payment, it is counted as invalid.
Exceptions:
Part Payment by a Third Party
Hirachand Punamchand v Temple
- The father of D approached the P and asked
to pay a lesser sum and P accepted the part
payment as full payment owed by the son.
- P brought an action against the son to
recover the sum..
Held + Ratio: The action fail. If allowed, the P will
defraud the father.
Composition Agreements
If D owed a few people a sum of money in which
he is not capable of paying back and he met
with all of them and agreed to pay a part
payment to which they will take as the full sum, if
one of the people decides to bring an action for
a full amount, he will fail because it allows D to
be held for defraud against the other people as
it wont be fair for them.
Promissory Estoppel
The doctrine provides a means of making a
promise binding, in certain circumstances, in
the absence of consideration.
- Even is someone pays a lesser sum, it can
still be good consideration.
- Works on the concept of equity.
9. Promissory Estoppel
A promisor is not allowed to back on the
promise given to the promisee where he
acted upon it to his detriment.
Must only be used as a defence.
Promisee relies.
Baird Textile Holdings v Mark & Spencer [2001]
EWCA Civ 274 Denning J in Central London
sh = shillings Monday, 26 October 2015
Property Trust Ltd. v High Trees House Ltd - D held a lease of certain houses from P. The
(1947) KB 130 lease contained a covenant of repair within 6
months of being given notice.
- P gave notice. D suggested that a sale might
be arranged and that it would defer carrying
out any repairs until discussed.
- Some negos took place but no agreement
was resulted.
- April :P then served a notice to quit on the
basis of the Ds failure to comply with the
original notice to repair.
Held: P was not entitled to do so. Time pauses
during the negotiation period. Eviction notice
should be served during June.

- P owned a block of flats in London to which Tool Metal Manufacturing Co. v Tungsten
Electric Co.
they rented to the defendants for 2500,
per annum.
- During the Second World War, the
occupancy rate was low and P agreed to
halve the rent.
- After the war ended, the occupancy rate was
increased to normal levels. The plaintiffs then
sought to 1) return to the original terms of
the agreement and 2) claim the other half of
the rent for the war years as there was no
change in consideration.
HELD: 1) Ps were entitled to recover the full
rent from post-war. 2) Ps cannot claim the
balance during war years.
RATIO: A promise intended to be binding,
HELD: The promisor could withdraw the
intended to be acted upon, and in fact acted on,
promise by giving reasonable notice, from which
is binding s far as its terms properly apply. -
the ori terms of the agmt would come back into
Denning J. Ps were bound by their promise
operation.
which had been acted upon by Ds during the
war years.
Requirements
Hughes v Metropolitan Railway (1877) 2 App 1. There must be a Contractual or Legal
Cas 439 Relationship.
Durham Fancy Goods v Michael Jackson (FG)
- DFG sold some goods to MJ. DFG prepared a
demand draft, DFG wrote M. Jackson Fancy
Group instead of Michael Jackson Fancy
group.
- CEO of MJFG signs the draft/bill and DFG
sent it to the bank. The bank rejected the
draft due to the incorrect name.The director
of the company has to check on the name. If
not, the director would be representing a
fictitious company, then the director
becomes personally liable to DFG.

2
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HELD: Although there is no contractual
relationship between the director and DFG but
there is a legal relationship (s 108 of the
Companies Act 1948 + Mr Jackson was a
director of MFJ + the contractual arrangement
existed between Ps and Ds which led to the bill)
as a third party. The director cannot escape
from the agreement and DFG can apply
promissory estoppel.
MJFG receives the goods.
2 NOVEMBER 2015
2. Clear and Unambiguous Promise.
Hughes v MRC
3. Reliance.
To rely on promissory estoppel, there is no need
to prove that one will gain detriment/benefit.
Just need to show that one has acted on their
promise.
Ajayi v Brisdcoe, Alan Co Ltd v El Nasr Export &
Import Co.
HELD: It did not matter if B obtained detriment/
benefit to rely on PE because B showed
reliance. Payment should be in pounds because
the letter of credit and invoice stated sterling
pound.
Other requirements
Is it inequitable to revert on the promise
given?
D & C Builders v Rees
- Rees contracted a small company to do
work. It came up to 500 and Rees refuse to
pay. The wife knew they were in financial
trouble and agreed to pay a 300. She told
them that it was all they were gonna get.
- The builders took the payment but went back
on their promise and went to court as they
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felt cheated. Rees wanted to rely on PE. He
argued that the agreement was
unambiguous.
Held: Is Rees/Builders acting in an inequitable
manner? Rees - because the wife gave the
ultimatum and he refused to pay even he knew
the amount. Rees cannot rely on PE to not pay.
When one comes in to equity, one must come
with clean hands.
Was it used as a shield and not a sword?
Coombe v Coombe
- A couple went through a divorce. The wifes
solicitor met the husbands solicitor to argue
about support money. The H agreed to a sum
to which the wife agreed to.
- After some time, the husband stopped
sending the money. TJ allowed wife to use PE
to claim the money.
HELD: TJs decision was overturned at COA.
RATIO: At that time, the H was forced to pay the
support although the W earned more than H.
He lost his job and therefore could not afford to
pay W. Was the contract done with equal
parties?
Lord Denning stated that consideration
remained a cardinal necessity of the formation
of contract, but not of its modification of existing
legal relationship/discharge. PE is limited to
the modification of existing legal relationships
rather than to the establishment of new
obligation.
Does it extinguish rights or merely suspends
it?
Hughes v MRC
High Trees
Tool Metal Case,
D & C Builders v Rees
PE doesn't always extinguishes ones right to
get payment but merely suspends it. It can still
be revived in cases of periodic payment.
PE extinguishes a right to claim payment when
it is of a lump sum.
Limitations of the rule
There must be an existing legal relationship
There must have been a detrimental reliance
The doctrine can only be used as a shield not a
sword
It must be inequitable for the promisor to go
back on the promise.
sh = shillings Monday, 26 October 2015
The doctrine is only suspensory in nature. cf. Societe Italo-Belge v Palm Oils (Malaysia) (the
Post Chaser) [1982] 2 Lloyds Rep 695, 700
Combe v Combe [1951] 2 KB 215; [1951] 1
CASE LIST All ER 241:
The Scaptrade (Scandinavian Trading v Flota
Currie v Misa [1875] LR 10 Ex 153 Petrolera) [1983] 2 All ER 763; [1983] 3 WLR
Thomas v Thomas (1842) 2 QB 851 203
Chappell v Nestle [1960] 2 All ER 701 D and C Builders v Rees [1966] 2 QB 61
Pitt v PHH Asset Management [1993] 1 WLR Tool Metal Manufacturing v Tungsten Electric
327; 4 All ER 961 [1955] 2 All ER 657
Edmonds v Lawson [2000] QB 501
Thomas v Thomas [1842] 2 QB 851
Roscorla v Thomas [1842] 3 QB 234
Re McArdle [1951] Ch 669; [1951] 1 All ER
905
Lampleigh v Brathwait [1615] Hob 105; 80 ER
255
Re Caseys Patents [1892] 1 Ch 104
Stilk v Myrick (1809) 2 Camp 317; 170 ER
1168
Hartley v Ponsonby (1857) 7 E&B 872
Williams v Roffey Brothers & Nicholls
(Contractors) Ltd [1991] 1 QB 1
Collins v Godefroy (1831) 1 B & Ad 950
Glasbrooke Bros Ltd v Glamorgan County
Council [1925] AC 270
Ward v Byham [1956] 2 All ER 318
Scotson v Pegg (1861) 6 H & N 295; 158 ER
121
Shadwell v Shadwell (1860) 9 CBNS 159; 142
ER 62
New Zealand Shipping v AM Satterthwaite, The
Eurymedon [1975] AC 154
Pao On v Lau Yiu Long [1980] AC 614
Foakes v Beer (1884) 9 App Cas 605
Re Selectmove [1995] 2 All ER 534
Ferguson v Davies [1997] 1 All ER 315
Welby v Drake [1825] 1 C&P 557 (Fraud
against the third party)
Hiramchand Punamchand v Temple [1911] 2
KB 330
Central London Property Trust Ltd. v High Trees
House Ltd (1947) KB 130
Hughes v Metropolitan Railway (1877) 2 App
Cas 439).
Baird Textile Hldgs v Mark & Spencer [2001]
EWCA Civ 274
Durham Fancy Goods Ltd v Michael Jackson
(Fancy Goods) Ltd [1968] 2 QB 839
Everden v Guildford [1975] QB 917
WJ Alan & Co v El Nasr [1972] 2 All ER 127
Ajayi v Briscoe [1964] 3 All ER 556