• 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...

Introduction

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.

Middle

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.

Conclusion

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)

    debt owned cannot be discharged by merely a partial performance of the original obligation, but through some new element as requested by the promisor such as part payment on an earlier date or payment by chattels. The underlying principle would be that the debtor had given no consideration for the promise to release the balance of the debt.

  2. Marked by a teacher

    Contract Law - Offer And Acceptance

    3 star(s)

    .Such a replies is not an acceptance but a counter-offer24 which the original offeror can accept or reject Brinkibon v Stahag Stahl (1983) The buyers, an English company, by a telex, sent from London to Vienna, accepted the terms of sale offered by the sellers, an Austrian company.

  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.

    Chapelton v Barry UDC [1940] 1 KB 532. The claimant hired a deck chair. The attendant gave him a ticket as proof of payment but put this in his pocket without reading it. The chair collapsed and he was injured.

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

    Judgement debts bear interest from the date of the judgement. By a written agreement the defendant agreed to accept payment by instalments of the sum of "2,091, no mention being made of the interest. Once the claimant had paid the amount of the debt in full, the defendant claimed interest, claiming that the agreement was not supported by consideration."

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

    in virtue of entitled to half share of property by way of resulting trust. 9 Followed Mildland Bank PLC v. Cooke [1995], the wife entitled under a resulting trust, in virtue of her half share to the amount of wedding gift contributed to purchase price of property.

  1. LAW OF CONTRACT. LAW 103. THE CONTENT OF THE CONTRACT.

    contract and so the producers were not entitled to repudiate the contract. Traditionally the courts classified a term by attempting to find the intention of the parties from the language of the contract itself and the circumstances under which it was entered into. For example, in Behn v Burness (1863)

  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