• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Geoff now regrets having made a promise to forego the second payment - Advise him about recovering the money from Paul.

Extracts from this document...


Geoff is the owner of a 1927 Bentley car, which he is renovating to its original condition with considerable help from his brother, Paul. When the work is nearly completed, Geoff decides to get married and can no longer keep the car. He discusses the situation with Paul and they agree that in consideration of all the work Paul has done on the car, Paul can have it for �2,000 (which is far less than the car is worth). They agree that the money will be paid in four half - yearly instalments of �500, the first being due in December. A note of their agreement is drawn up by Geoff, and signed by Paul and himself. Paul makes the first payment in December but soon after he discovers that it will cost much more to complete, the renovation than was originally thought, as some of the parts are having to be custom-made. Paul tells Geoff about this, and Geoff then agrees to forego the second payment, which has just fallen due in June of the following year. As a result Paul fees able to order the parts required. Geoff now regrets having made a promise to forego the second payment. ...read more.


consideration must have value, but need not be sufficient. Therefore the �2,000, although less than the value of the car, is valid consideration. Therefore, there is a contract that Paul will buy the car for �2,000. Now Paul realises he cannot keep the payments. Therefore we will look at whether G agreeing to forego the 2nd payment is a contract. By Pinnel's Case (1602), part payment of a debt does not discharge the whole debt unless there is further consideration e.g. paying earlier, or in a different form or if a different place. This was approved in Foakes v Beer (1984). This means Paul is already bound to pay Geoff the full amount and has furnished no consideration by the new promise to accept less. Re Selectmove (1995) tried to apply the approach in Williams v Roffey (1990) to debts and said that if the creditor got a benefit from the part payment, it should discharge the debt. The court said no. The Court of Appeal was bound by the House of Lords decision in Foakes v Beer. Therefore, if Paul tells Geoff to keep his promise to forego the �500 June payment as following Pinnel's case, part payment of a debt will not discharge the full debt. ...read more.


For estoppel, it must be inequitable for Geoff to go back on his promise. In DC Builders v Rees (1966), it was inequitable as the promisor had made the promise in response to pressure exerted by the promisee. Geoff could argue that he has not acted inequitably while he did not know Paul would order new parts. Paul as already go the car for well below motor value and Geoff has acted honestly and reasonably. Whether estoppel suspends or extinguishes rights is debatable. Tool Metal v Tungsten Electric Co (1955) said it suspends rights but the High Trees case says it extinguishes rights. It is thought that here it would extinguish Geoff's rights to the �500, if estoppel was held valid. Finally by Combe v Combe (1951), estoppel must be used as a shield and not as a sword. Here, it appears that Paul is using it as a defence and should have no problems. Thus, Paul and Geoff had an agreement at law that Geoff will sell Paul the car for �2,000. This is binding on the parties. The agreement by Geoff to forego the �500 June payment is not binding at law, so Geoff can require the full date to be repaid (Foakes v Beer (1984)). The only bad point for Geoff is that Paul could rely on Promissory Estoppel and stop Geoff from claiming the full debt. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Law of Contract section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Law of Contract essays

  1. Marked by a teacher

    "The requirement of consideration is an unnecessary complication in the formation of contracts."

    4 star(s)

    without the existence of consideration, a promise shall be deemed to be enforceable. An estoppel prevents the promisor/representor from acting inconsistently with an assumption that the promiser had represented without taking steps to ensure that the departure does not cause harm to the representee.

  2. Marked by a teacher

    Contract Law - Offer And Acceptance

    3 star(s)

    Acceptance must be unqualified * a communication may fail to take effect as an acceptance because it attempts to vary the terms of the offer Tinn v Hoffmann & Co 1873 An offer to sell 1,200 tons of iron is not accepted by reply asking for 800 tons North West Leicestershire D.C.

  1. e-commerce legal issues

    The seller must communicate to the 'winner' that he is going to accept it and negotiate further delivery and payment method, it can not be a message merely notify the offeror that the offer has been received. Although the seller can communicate to the buyer via any communication method, in

  2. Four ways in which a contract may be discharged.

    breach of contract or for damages arising in some other way (perhaps out of a negligent act). Consideration needs to be given to the legal validity of these clauses under both common law and relevant statutory provisions. IS THE CLAUSE BINDING AT COMMON LAW?

  1. I have been asked to advise a client on considering contracting with a building ...

    Promissory estoppel Promissory estoppel operates when a person, by his words or conduct, leads another to believe that a certain state of affairs exists. If the other person, relying on the belief, alters his position to his detriment, the first person is prevented from claiming later that a different state of affairs existed.


    v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26. The contract was for the charter of a ship for a period of 24 months. A term in the contract required the ship to be "in every way fitted for ordinary cargo service."

  1. In advising Bennys position of the interest over the said property (the flat), it ...

    2. If the representee use his/her money improving or changing his own land in reliance on a representation made by the representor of entitlement to the representor's land23. 3. A representee will have acted to his/her detriment if he/she purchase new land on the basis of a representation made by the representor24.

  2. Law of Contract - Promissory Estoppel

    stated in Pinnel's case and Foakes v Beer whereby the part payment of $1 is not considered to be full satisfaction of the $10 rental. This would in effect mean that Kajai is still liable to pay the balance of $9 because he has not provided consideration for the promise made by Long.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work