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Part Payment And Promissory Estoppel Notes

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A more recent version of these Part Payment And Promissory Estoppel notes – written by Cambridge/Bpp/College Of Law students – is available here.

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Revision: Contract

General rule: At common law, payment of a lesser sum does not discharge the obligation to pay the full amount


Foakes v Beer: There is no consideration for a promise to accept less, so it is not binding


Re Selectmove: company tried to argue Williams v Roffey - but If this applied then Foakes v Beer would always be circumvented, so judge argued that Foakes v Beer was too well established


Therefore: o

Promise to pay more -use Williams v Roffey


But promise to accept less - then must use Foakes v Beer

Exceptions to the Part Payment Rule The Common Law Pinnel's Case :

1. Different 'thing': - 'a hawk, a horse, or a robe' o

Confirmed in Sibree v Tripp: tender of a promissory note was a sufficient novelty to constitute consideration for the creditor's promise to accept a lesser sum


D & C Builders v Rees :part payment by cheque (negotiable instrument) was in no way better than paying the full amount in cash - not sufficiently new

2. Different 'place': needs to be an advantage of meeting in a different place - the advantage acts as good consideration

3. Different 'time' - earlier: money sooner is better than money later Welby v Drake : payment by a 3rd party


D's son owed the C PS18 - D's father then made agreement to pay it off, but for a lesser amount (PS9) o

Where a lesser amount is paid in satisfaction of a debt by a third party to that debt, the creditor cannot sue for the balance


Some cases have found fraud - e.g. CA Hirachand Punamchand v Temple - but breach of contract won't amount to fraud at CL unless promisor knew at the time of promising that he had no intention of keeping to promise

Promissory Estoppel: An equitable exception to the general rule 1

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