Part- Payment of Debt - Contract Law Help!!
Here is the problem question.
Nicky is a freelance writer and works from home where she depends on her home computer. She is currently ghost writing the autobiography of Tom Jerry, a well known footballer, and has a deadline from the publishers of the 30th June. Her computer breaks down on 15th June and unless it can be repaired very quickly she will lose a number of draft chapters which will make it impossible to finish by her deadline in two weeks. She has a service contract with PC Correct which guarantees repair within ten working days. She phones Peter at PC Correct and promises him an extra £500 if he gets the computer working within 3 working days. Peter comes out the following day and has the computer working within 24 hours.
Meanwhile, the Daily Scan, which is to serialise extracts from the book, had also promised Peter £1000 if he can get the computer repaired within a week but they ultimately refuse to pay him saying that he was contracted to do it all along.
Once the computer is repaired, Nicky tells Peter that she is currently short of funds and can’t pay £500. Peter says he will accept £200 in the circumstances. Nicky gives him £200 and says, given his flexible attitude, she is also giving him some signed photos of Tom Jerry which will be worth quite a bit. Next month Peter learns that Nicky has been paid half a million pounds for writing the book and that the Daily Scan’s sales have doubled whilst they serialise it. He now wishes to claim the £1000 from the Daily Scan and also the £300 balance from Nicky.
Advise Peter..
........
This scenario arises a few issues and they are in regards to part-payment of debt, performance of an existing contractual duty and promissory estoppel and that is if the requirements within the Pinnel’s case are not met.
Can someone please enlighten me on the issue whether Nicky’s signed photos amount to one of the three requirements set out in the Pinnel’s case ( payment by different means).
I’m leaning towards the argument that Peter can recover the outstanding money because it seems as though she gave him the photos as gratitude rather than as a fresh consideration and it seems like he did not accept them in satisfaction of discharging the whole debt.
If this is correct and Peter is able to recover the money he may not be however under promissory estoppel if she can prove that she had relied on his promise.
Am I on the right lines here?
Nicky is a freelance writer and works from home where she depends on her home computer. She is currently ghost writing the autobiography of Tom Jerry, a well known footballer, and has a deadline from the publishers of the 30th June. Her computer breaks down on 15th June and unless it can be repaired very quickly she will lose a number of draft chapters which will make it impossible to finish by her deadline in two weeks. She has a service contract with PC Correct which guarantees repair within ten working days. She phones Peter at PC Correct and promises him an extra £500 if he gets the computer working within 3 working days. Peter comes out the following day and has the computer working within 24 hours.
Meanwhile, the Daily Scan, which is to serialise extracts from the book, had also promised Peter £1000 if he can get the computer repaired within a week but they ultimately refuse to pay him saying that he was contracted to do it all along.
Once the computer is repaired, Nicky tells Peter that she is currently short of funds and can’t pay £500. Peter says he will accept £200 in the circumstances. Nicky gives him £200 and says, given his flexible attitude, she is also giving him some signed photos of Tom Jerry which will be worth quite a bit. Next month Peter learns that Nicky has been paid half a million pounds for writing the book and that the Daily Scan’s sales have doubled whilst they serialise it. He now wishes to claim the £1000 from the Daily Scan and also the £300 balance from Nicky.
Advise Peter..
........
This scenario arises a few issues and they are in regards to part-payment of debt, performance of an existing contractual duty and promissory estoppel and that is if the requirements within the Pinnel’s case are not met.
Can someone please enlighten me on the issue whether Nicky’s signed photos amount to one of the three requirements set out in the Pinnel’s case ( payment by different means).
I’m leaning towards the argument that Peter can recover the outstanding money because it seems as though she gave him the photos as gratitude rather than as a fresh consideration and it seems like he did not accept them in satisfaction of discharging the whole debt.
If this is correct and Peter is able to recover the money he may not be however under promissory estoppel if she can prove that she had relied on his promise.
Am I on the right lines here?
Original post by ktwolves
Nicky’s signed photos
Apply Chappell & Co Ltd v Nestle Co Ltd [1960]
Apply Chappell & Co Ltd v Nestle Co Ltd [1960]
Consideration must be sufficent but need not to be adequate - but did Peter accept them in lieu of money?
Re the photo instead of £300 -
In Pinnel's case it is said that 'a hawk, horse or robe might be more beneficial to the plaintiff' and therefore this is sufficient consideration. so by her paying £200 PLUS the signed photo, this is sufficient consideration. The reason for this is because the mobile phone has some value to her that goes beyond the mere repayment of the dept
In Pinnel's case it is said that 'a hawk, horse or robe might be more beneficial to the plaintiff' and therefore this is sufficient consideration. so by her paying £200 PLUS the signed photo, this is sufficient consideration. The reason for this is because the mobile phone has some value to her that goes beyond the mere repayment of the dept
Original post by lawstudent93
Re the photo instead of £300 -
In Pinnel's case it is said that 'a hawk, horse or robe might be more beneficial to the plaintiff' and therefore this is sufficient consideration. so by her paying £200 PLUS the signed photo, this is sufficient consideration. The reason for this is because the mobile phone has some value to her that goes beyond the mere repayment of the dept
In Pinnel's case it is said that 'a hawk, horse or robe might be more beneficial to the plaintiff' and therefore this is sufficient consideration. so by her paying £200 PLUS the signed photo, this is sufficient consideration. The reason for this is because the mobile phone has some value to her that goes beyond the mere repayment of the dept
Can you clarify on this bit as I don’t quite understand it
How about you go read up Pinnel's case in your text book first? And then if you still don't understand it i'll try to help you out
this is a quote from the case:
'payment of a lesser sum on the day in satisfaction of a greater, cannot be any satisfaction for the whole, because it appears to the Judges that by no possibility, a lesser sum can be a satisfaction to the plaintiff for a greater sum: but the gift of a horse, hawk, or robe, etc. in satisfaction is good... as it is more beneficial to the plaintiff than the money.'
'payment of a lesser sum on the day in satisfaction of a greater, cannot be any satisfaction for the whole, because it appears to the Judges that by no possibility, a lesser sum can be a satisfaction to the plaintiff for a greater sum: but the gift of a horse, hawk, or robe, etc. in satisfaction is good... as it is more beneficial to the plaintiff than the money.'
I agree with the OP that the signed photos do not constitute accord and satisfaction of the £300. They were not offered as such, they were offered as a gratuitous extra on top of the £200. *IF* Nicky had said "Will you take £200 and these photos instead of £500?" and Peter had agreed, then there is no question at all that the photos could be sufficient consideration for the £300, but that is not what happened.
The suggestion to go and read Pinnel's case is an ironic one because in that case the defendant was forced to pay the entire debt for the same reason.
The suggestion to go and read Pinnel's case is an ironic one because in that case the defendant was forced to pay the entire debt for the same reason.
We were taught that if a promise to accept £990 to discharge a dept worth £1,000, the Claimant can still claim for the £10. Where as if i was to promise to pay you £10 and give you my mobile phone (instead of the £1,000), although my mobile is of course no way near the value of £990 it can discharge the dept and therefore the promise is enforceable.
Although perhaps because he didn't directly accept the photo, then it might not be enforceable!
Although perhaps because he didn't directly accept the photo, then it might not be enforceable!
Original post by lawstudent93
this is a quote from the case:
'payment of a lesser sum on the day in satisfaction of a greater, cannot be any satisfaction for the whole, because it appears to the Judges that by no possibility, a lesser sum can be a satisfaction to the plaintiff for a greater sum: but the gift of a horse, hawk, or robe, etc. in satisfaction is good... as it is more beneficial to the plaintiff than the money.'
'payment of a lesser sum on the day in satisfaction of a greater, cannot be any satisfaction for the whole, because it appears to the Judges that by no possibility, a lesser sum can be a satisfaction to the plaintiff for a greater sum: but the gift of a horse, hawk, or robe, etc. in satisfaction is good... as it is more beneficial to the plaintiff than the money.'
I really do understand the quote and the case but what I’m questioning is the scenario and how the ‘chattel’ is carried out and whether it falls within the requirements set out in the Pinnel’s case. Did he agree to accept them in lieu of the debt? Was this additional consideration accepted in contemplation of discharging the whole debt?
Original post by lawstudent93
We were taught that if a promise to accept £990 to discharge a dept worth £1,000, the Claimant can still claim for the £10. Where as if i was to promise to pay you £10 and give you my mobile phone (instead of the £1,000), although my mobile is of course no way near the value of £990 it can discharge the dept and therefore the promise is enforceable.
Although perhaps because he didn't directly accept the photo, then it might not be enforceable!
Although perhaps because he didn't directly accept the photo, then it might not be enforceable!
Yes, we were taught the same thing and whether the mobile phone is worth less than the owed money does not concern the courts as consideration must be sufficient but not need to be adequate.
Original post by lawstudent93
We were taught that if a promise to accept £990 to discharge a dept worth £1,000, the Claimant can still claim for the £10. Where as if i was to promise to pay you £10 and give you my mobile phone (instead of the £1,000), although my mobile is of course no way near the value of £990 it can discharge the dept and therefore the promise is enforceable.
Although perhaps because he didn't directly accept the photo, then it might not be enforceable!
Although perhaps because he didn't directly accept the photo, then it might not be enforceable!
This last part was precisely the OP's point.
If you promise to pay £10 and a mobile phone then that will be good consideration for a debt of £1,000, assuming the other party accepts it as such.
If you promise to pay £10 as satisfaction for a debt of £1,000 and then add "Plus I'll chuck in my mobile phone for free" that, arguably, will not work. In that case the mobile phone is being offered as a gift, not as part of the consideration for the £1,000; the only consideration for the £1,000 is £10, and we know from Foakes v Beer that will not be enough.
(edited 11 years ago)
Okay perhaps i should have read the scenario better. I would have said apply that... but then again he didn't accept the photo she gave it to him. I don't know if the fact that they will be 'worth quite a lot' helps in this situation. But i would certainly apply that quote, and then question it as to whether or not he accepted the photo and therefore discharged the dept!
given his flexible attitude, she is also giving him some signed photos of Tom Jerry which will be worth quite a bit.
It is for you to argue that she did offer the signed photos, if accepted, this would amount to a consideration for the outstanding debt. Being flexible suggests there was likely acceptance of the new arrangement. Quite a bit is of course means adequate.
You can also argue there was exchange of gratitudes.
Comment: This is of course an academic argument, for an exam, to illustrate the doctrine of consideration. There are no right answers but the same law, the need for consideration, has been applied.
It is for you to argue that she did offer the signed photos, if accepted, this would amount to a consideration for the outstanding debt. Being flexible suggests there was likely acceptance of the new arrangement. Quite a bit is of course means adequate.
You can also argue there was exchange of gratitudes.
Comment: This is of course an academic argument, for an exam, to illustrate the doctrine of consideration. There are no right answers but the same law, the need for consideration, has been applied.
(edited 11 years ago)
Original post by Forum User
I agree with the OP that the signed photos do not constitute accord and satisfaction of the £300. They were not offered as such, they were offered as a gratuitous extra on top of the £200. *IF* Nicky had said "Will you take £200 and these photos instead of £500?" and Peter had agreed, then there is no question at all that the photos could be sufficient consideration for the £300, but that is not what happened.
The suggestion to go and read Pinnel's case is an ironic one because in that case the defendant was forced to pay the entire debt for the same reason.
The suggestion to go and read Pinnel's case is an ironic one because in that case the defendant was forced to pay the entire debt for the same reason.
Thank you
That is exactly how I understood the situation.
Original post by HanaKimi
Thank you
That is exactly how I understood the situation.
That is exactly how I understood the situation.
No worries, but as LawStudent93 says, and ktwolves implies, it is a good idea to discuss the other possibility as well - so your answer could say "The photos could be sufficient consideration for the remaining £300 if they were offered in accord and satisfaction of that part of the debt and accepted as such, but this does not appear to be the case (explain why)" (and cite Pinnel's case and perhaps Chappell v Nestle).
That way you show you understand the law even if you decide on the facts that the situations are distinguishable.
(edited 11 years ago)
Original post by Forum User
No worries, but as LawStudent93 says, and ktwolves implies, it is a good idea to discuss the other possibility as well - so your answer could say "The photos could be sufficient consideration for the remaining £300 if they were offered in accord and satisfaction of that part of the debt and accepted as such, but this does not appear to be the case (explain why)" (and cite Pinnel's case and perhaps Chappell v Nestle).
That way you show you understand the law even if you decide on the facts that the situations are distinguishable.
That way you show you understand the law even if you decide on the facts that the situations are distinguishable.
I see the logic and reasoning behind everyone’s comment and it is good to state all possibilities and then conclude according to how you’ve presented and argued your case. I was just getting worried all my revision and hard work went out of the window
I agree with Forum user and yourself after reading the scenario more clearly!
(Lucky i did that now and not my exams!)
Good luck
(Lucky i did that now and not my exams!)
Good luck
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