Case Study: Contract Law Analysis of Pinnel's Case and Part Payment

This case study analyzes the legal implications of Pinnel's Case, focusing on the issue of part payment in contract law. The scenario involves Tom owing Sam $1000, with a subsequent agreement to accept $700 as full settlement. Applying the rules established in Pinnel's Case, the analysis determines whether Tom is liable for the remaining $300. The study also explores the exception where additional consideration, such as a chocolate box, is offered alongside the reduced payment. The conclusion differentiates between Tom's liability under the original agreement and the potential discharge of liability if the exception applies, referencing relevant legal principles and case law.

Contract
Running head: 0
Student’s Name

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Contents
Issue.................................................................................................................................................2
Rules................................................................................................................................................2
Application......................................................................................................................................4
Conclusion.......................................................................................................................................4
References........................................................................................................................................5

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Issue
(a) the issue of the case is to check that whether Tom is liable to pay the remaining $300 to
Same?
(b) another issue is to check whether Tom would be held liable to pay $300 if the same had
offered $700 in addition to a chocolate box to Sam.
Rules
A contract can be understood as a set of promises that each party of the transaction gives to each
other and is liable to perform the same. There are some basic elements of a contract, which
includes, offer, consent, consideration, and intention of the parties to develop a legal relationship.
Each of the element has it is own significance and in the absence of any one or more than one
element, an agreement can fail to become a contract. Moving the focus towards such an element
which is a consideration this is to necessary that consideration can be anything and the same is
not required to be present in the monetary form. Nevertheless, consideration must be something
that has a certain value in the opinion of the law and the same must be legal. The discussion of
the consideration is required here as because, for this element only, parties to the contract
perform their promises. A contract deemed to have performed when both of the parties perform
their promises or may say pay out the consideration to other parties.
Part performance:- It is a situation where one of the parties to the contract does not perform the
original promise and perform only part of the same. For instance:- A hired B to sing in two of the
events but B only performed in one event. This is the part performance on the part of B. In the
contracts of the loan, sometimes debtor makes the part payment of the loan and wants to settle

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the entire amount. In order to know whether a debtor can do so or not, the facts and decision of
the case of Pinnel's Case [1602] 5 Co. Rep. 117a are necessary to know. In this case, the person
named Cole owed another person Pinnel, the sum of £8 10s. When Pinnel asked Cole to repay
the money, Cole makes the payment of £5 2s 2d (E-lawresources.co.uk, 2019). He made this
payment one month before the actual due date of payment and stated that as per the mutual
agreement he and Pinnel have decided to treat this part payment as the settlement of entire debt
(Swarb.co.uk 2018). In the decision of this case, Lord Coke said that Payment of a lesser amount
cannot satisfy the greater sum but payment of something else which is more beneficial to the
creditor can discharge such liability. The more beneficial element can be anything such as horse,
robe, hawk etc. (Poole, 2016). Further, he stated that by making the part payment before one
month from actual debt, Cole has provided something more beneficial to Pinnel and therefore the
part payment is allowed as the settlement of full amount.
The decision given in the case is far important where Sir Edward Coke stated that part payment
of a debt cannot discharge the liability to pay the entire amount (Revolvy.com, 2019) However,
some exceptions of this rule are also there which are stated as below:-
 If the debtor pays the less amount in advance and creditor accept the same in against of
full satisfaction of the debt
 If debtor pay a valuable object at the place of lesser sum and creditor accept the same
(Owens, 2013)
 If the debtor pays an object in addition to the lesser sum and creditor accept the same.
 If the debtor pays a lesser sum at a different place on the request of a creditor.

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If any of the situations is there, then the lesser sum paid by a creditor can be considered as a full
settlement of the amount.
Application
In the given case, Tom owed $1000 to Sam and 10 May was the due date to repay this amount.
When Tom found himself unable to pay the sum he informed his concern on 9 May. It was
decided between them that Sam will accept $700 in the full settlement of debt. Next week, Sam
asked Tom the balance of debt that is s$300. Now applying the provisions of Pinnel case, Tom is
obliged to pay the same. As given in the decision of the case, part payment cannot settle the full
amount of debt, Sam can ask for the balance money to Tom. In the given case, Tom did not make
the payment of $700 early to the consented date and therefore there is no extra benefit for Sam.
Further, if Sam becomes agrees to take $700 in addition to a chocolate box then the third
exception of Pinnel case will be applicable. This exception says that if the creditor accepts the
lesser amount in conjunction with an object then the debtor can be discharged from his/her
liability.
Conclusion
To conclude the asked issues, the following is to mention
a) Tom is liable to pay remaining $300 pursuant to rule given in Pinnel case.
b) Tom is not liable to pay the balance amount pursuant to the exception of the rule given in
Pinnel case.

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References
E-lawresources.co.uk. (2019) Pinnel's Case 1602 5 Rep, 117 Court of Common Pleas. [online]
Available from: http://e-lawresources.co.uk/Pinnel's-Case.php [Accessed on 28/01/19]
Owens, K. (2013) Law for Non-Law Students. Oxon:Routledge.
Pinnel's Case [1602] 5 Co. Rep. 117a
Poole, J. (2016) Textbook on Contract Law. UK :Oxford University Press.
Revolvy.com. (2019) Pinnel's Case. [online] Available from:
https://www.revolvy.com/page/Pinnel%27s-Case [Accessed on 28/01/19]
Swarb.co.uk. (2018) Pinnel’s Case, Penny V Core: Ccp 1602. [online] Available from:
https://swarb.co.uk/pinnels-case-penny-v-core-ccp-1602/ [Accessed on 28/01/19]