Pinnel's Case

"Pinnel's Case" cite book
last=Coke
first=Edward
authorlink=Edward Coke
editor=Thomas, John Henry and Fraser, John Farquhar
title=The Reports of Sir Edward Coke
origyear=1604
url=http://books.google.co.uk/books?id=DlYDAAAAQAAJ&printsec=titlepage&source=gbs_summary_r&cad=0#PRA8-PA238,M1
accessdate=2008-10-11
volume=3
date=1826
publisher=Butterworth's
pages=238-239
quote=Pinnel's Case (1602) 5 Co Rep 117a] (otherwise known as "Penny v Cole") is an important case in English contract law, on the doctrine of part performance.

Facts

The plaintiff sued the defendant for the sum of £8 10s. The defence was based on the fact that the defendant had, at the plaintiff's request, tendered £5-2s-6d before the debt was due, which the plaintiff had accepted in full satisfaction for the debt.

Rule

The rule in "Pinnel's Case" is that:

:"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] more beneficial to the plaintiff than the money."

The rule is obiter; in "Pinnel's Case" itself the debt was paid before the date of satisfaction, which was considered good consideration.

Application

The decision was applied by the House of Lords in "Foakes v Beer" ["Foakes v Beer" [1884] 9 A.C. 605.] to another part payment of debt.

This can be contrasted with the parallel authority of "Stilk v Myrick", ["Stilk v Myrick" (1809) SC 6 Esp 129.] where it was agreed that crewman would be given additional wages to help guide the ship home. The Court of Common Pleas held that the crewmen did no more than they were originally contracted to do, meaning they offered no consideration for the new contract, rendering it void.

"Pinnel's Case" and the line of authority that flowed from it was distinguished in the decision of "Williams v Roffey Bros", ["Williams v Roffey Bros" [1991] 1 QB 1.] where the English Court of Appeal held that performing an existing obligation could be good consideration where it conferred some "practical benefit" above what was originally envisaged. In that case, it was held the a subcontractor who had asked for additional remuneration to do previously agreed work was enforceable, as avoid the subcontractor going into bankruptcy (which otherwise would have happened) constituted a practical benefit. The reasoning in "Williams v Roffey Bros" has been doubted in subsequent cases, although it has not been overruled.

There are several well defined exceptions to "Pinnel's Case", most notably being settlement in litigation where the parties agree to compromise by a payment a lesser sum without admitting that the greater sum was due. Payment of a lesser sum will also be sufficient where the currency changes, where the time of payment is brought forward, or where the place or manner of payment is changed (applying the long established rule that the Court will not look into the adequacy of the consideration; that is, if a creditor is foolish enough to take 50 pence in the pound to get his money a week earlier, he is entitled to do so). The rule will also not undermine an agreement to accept a lesser sum when the original agreement is novated, or where the agreement to accept a lesser sum is made by way of a deed, or specialty contract.

References

ee also

* "D & C Builders Ltd. v. Rees"
* "Foakes v Beer"