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    Hi all,
    I am having trouble comprehending something.

    Foakes v Beer says part payment of a debt cannot be satisfaction for the whole.

    Now I have come across MWB v Rock, which is awaiting judgment from the Supreme Court. I have read a lot of articles on this, and a lot of people argue that it effectively undermines Foakes V Beer and the Selectmove (sp?) case.

    From what I understand, in MWB the decision was effectively where practical benefit can be found it can amount to consideration for a creditors agreement for a revised payment schedule. I.e Rock was in arrears for renting premises. MWB agreed Rock could pay less for a few months, then pay more thereafter. So a new payment arrangement, but the end result being that after the 12 months, it would pay the same as it would have if there had been no variation at all. The only difference being that it would pay less initially, but then would pay more thereafter. I cannot see why this undermines Foakes V Beer and Selectmove? Ok maybe Selectmove because that concerned an instalment arrangement too. But why Foakes v Beer? Rock isn't trying to suggest that MWB agreed to pay less then it should have done, the only thing Rock agreed was that it would pay the full amount it owed, but just that it would pay differently (less to begin with, more thereafter).

    I really just don't see why people argue this effectively leaves F v B without application? Had it been a case of MWB agreeing to take less then they were owed all together, then yes ok that would clearly undermine. But they didn't?

    I keep seeing reference to part paying of debt being the same as deferral of debt due to time value of money???

    I have no idea how agreeing to part payment of a debt in satisfaction of the full can be seen (and therefore treated the same) as deferral of debt due to time value of money????????

    One is getting paid the same, just over a longer time / differently to what was agreed

    One is just getting less then your owed.

    Please help, cannot get my head around this??
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    Most students don't bother with i-law but there was an article in LMCLQ which effectively agrees with your assessment. MWB isn't really a Foakes v Beer case because there was an equal or better position as regards the sum of payment.

    The problem is that the reasoning might lead other judges to follow the ratio of the case in a negative sum agreement, as they have wanted to do ever since Lord Blackburn's "dissent" in F v B. Kitchin LJ in MWB, however, makes it clear that it is the equal or better position which sets this case apart from F v B and re Selectmove, so it is difficult to see how this case reinvents "practical benefit" per se.
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    (Original post by Notorious_B.I.G.)
    Most students don't bother with i-law but there was an article in LMCLQ which effectively agrees with your assessment. MWB isn't really a Foakes v Beer case because there was an equal or better position as regards the sum of payment.

    The problem is that the reasoning might lead other judges to follow the ratio of the case in a negative sum agreement, as they have wanted to do ever since Lord Blackburn's dissent in F v B. Kitchin LJ in MWB, however, makes it clear that it is the equal or better position which sets this case apart from F v B and re Selectmove, so it is difficult to see how this case reinvents "practical benefit" per se.
    Thanks for this. I have now got myself in a muddle about something else.

    Why is F v B relevant in the Selectmove case? Again Selectmove weren't proposing to pay less overall, just pay by instalments to pay the whole owed. So I don't understand, well I understand why simply paying what you already owe is not consideration, but what I don't understand is the application of F v B to it? Isn't F v B concerned with paying less then what you owe? Selectmove seems to suggest it isn't consideration to simply pay what you already owe. I get that. But when I see Selectmove it summaries always suggest that there was no consideration because of the rule of F v B???
    I am obviously missing a very basic point clearly? To me there is a difference between paying less then what you owe, and paying what you owe by instalments??
    Thanks
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    (Original post by Ticketedytoo)
    Thanks for this. I have now got myself in a muddle about something else.

    Why is F v B relevant in the Selectmove case? Again Selectmove weren't proposing to pay less overall, just pay by instalments to pay the whole owed. So I don't understand, well I understand why simply paying what you already owe is not consideration, but what I don't understand is the application of F v B to it? Isn't F v B concerned with paying less then what you owe? Selectmove seems to suggest it isn't consideration to simply pay what you already owe. I get that. But when I see Selectmove it summaries always suggest that there was no consideration because of the rule of F v B???
    I am obviously missing a very basic point clearly? To me there is a difference between paying less then what you owe, and paying what you owe by instalments??
    Thanks
    There are other benefits listed in the MWB judgments, such as the occupants continue to be in business and to use the premises, and accrue liabilities. This isn't exactly logical when you try to distinguish it from re Selectmove, as Selectmove could have continued to perform business and accrue tax liabilities for the Tax Man. Therefore, there was potentially a benefit to the Tax Man from the company's not being wound up. That is not necessarily true as the company could have lost even more money in the interim, and the Tax Man might have lost the ability to recover as much as if the company were wound up at an earlier date, but it's a reasonable argument to make.

    You are learning the valuable lesson that just because very clever judges say X does not mean that X makes sense.
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    (Original post by Notorious_B.I.G.)
    There are other benefits listed in the MWB judgments, such as the occupants continue to be in business and to use the premises, and accrue liabilities. This isn't exactly logical when you try to distinguish it from re Selectmove, as Selectmove could have continued to perform business and accrue tax liabilities for the Tax Man. Therefore, there was potentially a benefit to the Tax Man from the company's not being wound up. That is not necessarily true as the company could have lost even more money in the interim, and the Tax Man might have lost the ability to recover as much as if the company were wound up at an earlier date, but it's a reasonable argument to make.

    You are learning the valuable lesson that just because very clever judges say X does not mean that X makes sense.
    Hi, no I can sort of see the practical benefit thing.

    What I don't understand, and it's probably extremely basic, is why F v B "part payment of a debt is not satisfaction for the whole" even applied to Selectmove?
    Selectmove wasn't a part payment. It was paying the full amount owed, but by instalments. Selectmove seems to suggest that payment of what you already owe is no consideration for the instalment plan. However it is never said like that in any books or articles I have read. It is always put that Selectmove applied F v B and the instalment arrangement was not binding because part payment of a debt is not satisfaction of the whole / not consideration. But there is not a part payment. It is a deferred payment. So why does the principle of F v B apply to a case which isn't actually part payment, but deferred payment? When the actual amount paid back, well eventually, will be the whole, not part.

    Again, probably very basic. But I can't seem to get my head around it.

    I suppose it is this phrase I don't get "it's established that part payment of a debt is the same as deferral of debt because the value time of money"

    What?
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    (Original post by Ticketedytoo)
    Hi, no I can sort of see the practical benefit thing.

    What I don't understand, and it's probably extremely basic, is why F v B "part payment of a debt is not satisfaction for the whole" even applied to Selectmove?
    Selectmove wasn't a part payment. It was paying the full amount owed, but by instalments. Selectmove seems to suggest that payment of what you already owe is no consideration for the instalment plan. However it is never said like that in any books or articles I have read. It is always put that Selectmove applied F v B and the instalment arrangement was not binding because part payment of a debt is not satisfaction of the whole / not consideration. But there is not a part payment. It is a deferred payment. So why does the principle of F v B apply to a case which isn't actually part payment, but deferred payment? When the actual amount paid back, well eventually, will be the whole, not part.

    Again, probably very basic. But I can't seem to get my head around it.

    I suppose it is this phrase I don't get "it's established that part payment of a debt is the same as deferral of debt because the value time of money"

    What?
    I am not sure what is confusing you. I suggest you read the cases, in order, and you won't have the difficulty of trying to bundle together discrete pieces of text from many different sources to try to make sense of it. You really need to know the facts of the case and the ratio of the case, and ignore all the journal articles for now. It is clear from your questions that you are all over the place and you don't really understand, and getting back to the source is the only way to cure that.

    The trick is to keep things simple.
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    Hi, thanks. I was getting hung up on the whole part payment cannot be satisfaction for the whole.
    However it logically follows that merely part paying a debt you already owe is not consideration for anything. Because if it is not consideration to forgo a balance, then it follows that part paying by instalments (you are only part paying what you owe, until the point you have paid the whole!) is not going to amount to consideration to either forgo the balance, nor is it consideration for an agreement to pay by instalments in the first place.
    I know there’s exceptions to this.
    I think I was just looking at it to narrowly and believing that F v B would only apply to cases where there was genuine part payment only. But I can see now that although paying by instalments is paying the whole (eventually) up until the point of paying the whole, you are merely paying part. And merely paying part of what you owe is not going to be consideration for a variation in a contract, because of course you are obliged to pay the whole anyway!

    It’s the little things....
 
 
 
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