Foakes v. Beer
Encyclopedia
Foakes v Beer [1884] UKHL 1 is an English contract law
case, which applied the controversial Pre-existing Duty Rule in the context of part payments of debts. It is a leading case from the House of Lords
on the legal concept of consideration
. It established the rule that prevents parties from discharging an obligation by part performance, affirming Pinnel's Case
(1602) 5 Co Rep 117a. In that case it was said that "payment of a lesser sum on the day [i.e., on or after the due date of a money debt] cannot be any satisfaction of the whole."
, Julia Beer, a sum of £2,090 19s after a court judgment. Beer agreed that she would not take any action against Foakes for the amount owed if he would sign an agreement promising to pay an initial sum of £500 and pay £150 twice yearly until the whole amount was paid back. Foakes was in financial difficulty and, with the help of his solicitor, drew up an agreement for Beer to waive any interest on the amount owed. She signed. Foakes paid back the principal but not the interest. Then Beer sued Foakes for the interest. The question was whether she was entitled to it, despite their agreement that he would not need to pay it.
Lord Blackburn, however, while not overtly dissenting seemed to express reservations.
English contract law
English contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...
case, which applied the controversial Pre-existing Duty Rule in the context of part payments of debts. It is a leading case from the House of Lords
House of Lords
The House of Lords is the upper house of the Parliament of the United Kingdom. Like the House of Commons, it meets in the Palace of Westminster....
on the legal concept of consideration
Consideration under English law
Consideration in English law is one of the three main building blocks of a contract. Consideration can be anything of value , which each party to a legally binding contract must agree to exchange if the contract is to be valid. If only one party offers consideration, the agreement is not legally a...
. It established the rule that prevents parties from discharging an obligation by part performance, affirming Pinnel's Case
Pinnel's Case
Pinnel's Case 5 Co. Rep. 117a, also known as Penny v Cole, is an important case in English contract law, on the doctrine of part performance. In it, Sir Edward Coke opined that a part payment of a debt could not extinguish the obligation to pay the whole.-Facts:The plaintiff sued the defendant for...
(1602) 5 Co Rep 117a. In that case it was said that "payment of a lesser sum on the day [i.e., on or after the due date of a money debt] cannot be any satisfaction of the whole."
Facts
The appellant, John Weston Foakes, owed the respondentRespondent
A respondent is a person who is called upon to issue a response to a communication made by another. In legal usage, this specifically refers to the defendant in a legal proceeding commenced by a petition, or to an appellee, or the opposing party, in an appeal of a decision by an initial fact-finder...
, Julia Beer, a sum of £2,090 19s after a court judgment. Beer agreed that she would not take any action against Foakes for the amount owed if he would sign an agreement promising to pay an initial sum of £500 and pay £150 twice yearly until the whole amount was paid back. Foakes was in financial difficulty and, with the help of his solicitor, drew up an agreement for Beer to waive any interest on the amount owed. She signed. Foakes paid back the principal but not the interest. Then Beer sued Foakes for the interest. The question was whether she was entitled to it, despite their agreement that he would not need to pay it.
Queen's Bench
At trial, the court found in favour of Foakes. Watkin Williams J upheld this decision, given the agreement between the two. Mathew J said,Court of Appeal
Brett MR held, in a short judgment, that there was no consideration for the agreement. Lindley LJ and Fry LJ concurred without giving considered opinions.House of Lords
The House of Lords (Earl of Selborne LC, Lord Watson and Lord Fitzgerald) upheld the ruling of the Court of Appeal in favour of Beer. They reasoned that though the agreement did not contemplate the interest owed, it could still be implied given an enforceable agreement. However, the promise to pay a debt was deemed not to be sufficient consideration as there was no additional benefit moving from Foakes to Beer that was not already owed to her.Lord Blackburn, however, while not overtly dissenting seemed to express reservations.
See also
- English contract lawEnglish contract lawEnglish contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...
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- Williams v Roffey Bros Ltd
- Re Selectmove LtdRe Selectmove LtdRe Selectmove Ltd [1995] 1 WLR 474 is an English contract law case, concerning the doctrine of consideration, and part payments of debt.-Facts:Selectmove Ltd owed the Inland Revenue substantial sums in outstanding tax and national insurance...
- Collier v Wright Ltd
- Couldery v Bartrum (1881) 19 Ch D 394 at 399, Sir George Jessel MR, "According to English common law a creditor might accept anything in satisfaction of his debt except a less amount of money. He might take a horse, or a canary, or tomtit if he chose, and that was accord and satisfaction; but, by a most extraordinary peculiarity of the English common law he could not take 19 shillings and sixpence in the pound; that was nudum pactum."