The Present Position of Practical Benefit

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The Present Position of Practical Benefit Q. What is the present position of practical benefit keeping the following cases in mind: 1) Pinnel’s Case (1602) 2) Foakes v Beer (1884) 3) Williams v Roffey (1990) 4) Re Selectmove Ltd (1995) [IMAGE] 1) Pinnel’s Case (1602): The general rule is that if a creditor promises to discharge a debt in return for a fraction of the payment, in paying the agreed fraction, the promisee is not providing consideration for the promise, as this is merely part performance of a contractual duty already owed. Consequently, the debtor is still liable for the whole amount, as he cannot force the promissor to accept less. This is true unless the debtor provided fresh consideration for the promise. Where there was the introduction of some new element in the transaction, (at the creditor's request), then the court said it would be prepared to hold the creditor to his promise. However, the rule in Pinnel's Case can be avoided by providing "extra consideration, altering the way payment is made, by paying earlier, at a different time or place or via third party. So that, for example, would mean that the creditor was bound. In Pinnel’s Case, the court held that mere partial performance of the original obligation did not suffice to discharge the whole debt. The court found in favour of Pinnel, because part-payment of an original debt did not make for fresh consideration. Therefore the agreement was not a contract. The doctrine of consideration was also used was where alteration promises were made regarding the part payment of debts. The general rule as established in ... ... middle of paper ... ...se to pay extra and not to pay less. It should be noted, however, that the Court of Appeal in Re Selectmove were unable to distinguish Foakes v Beer (a House of Lords decision), in order to apply Williams v Roffey (Court of Appeal). It therefore remains to be seen whether the House of Lords would decide this point differently. In any event, the equitable principle of promissory estoppel may provide the debtor with relief. The Court of Appeal failed to acknowledge that its decision in Williams v Roffey was incompatible with the decision of the House of Lords in Foakes v Beer. Instead of harmonising these two lines of cases, the Court of Appeal in Re Selectmove Ltd restricted the application of the practical benefits analysis to the context of contract modification relating to only the supply of goods and services.

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