Foakes v Beer [1884] App Cas 605

• Plaintiff was owed money by Defendant and stated that Defendant, who couldn’t repay him on time, could pay in instalments and Plaintiff would not sue for the interest from the late repayment.

• HL said no contract, since this was a nudum pactum with no consideration from Defendant. Plaintiff could sue for the interest.

Earl of Selbourne LC

• Points out that payment of a lesser sum than that which is owed, with the rest coming with delay, cannot possibly be benefit/avoidance of harm to Plaintiff.

• There is a general rule from Coke that payment of part of a debt is not good consideration for a promise to discharge the whole for the debt.

Lord Blackburn

• Although he won’t overrule Coke’s doctrine, he does criticise it, since it is an avoidance of harm to business people to receive part of what is owed to them for certain and the rest later than to have to pursue their whole debt through the courts at great expense and taking much time.

• Therefore they should have the ability arrange for enforceable agreements of early payment. 

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Treitel also object to the rule: it would be easy to evade if the debtor provides consideration, for example by paying part of the debt a day early: this means that the law would be encouraging artificial behaviour. Also it is out of step with Roffey, which allows “same for less” or “same for more” agreements (though NB this still has the qualification that some benefit has to come from the agreement, which has not been proved in this case). 

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