1. Pinnel’s Case 1602:
This case establishes the principle that if one person owes money to another, then an agreement to paya lesser sum to settle the debt, is not binding. This is due to the fact that there is no new consideration as a support to the new agreement. In other words,the payment of a smaller sum would not discharge Smith to pay a higher sum.
BUT their exists an exception to this general rule: The part payment of a sumwill discharge a person from his obligation, when there is a new agreement settled down.
In our case, there was indeed a new agreement formed: After the 2ndof April, Smith informed Brown that he could only afford 20’000 p. Brown accepted this, for fear that, if he wouldn’t accept, receive nothing.
Why can we saythat there was acceptance?
- because until July 2010, Brown didn’t claim the “missing” 5000p.
- and Brown knew that Smith will give his propriety tolocation that he’ll do some benefit right after the works finished we could argue that Brown didn’t proposed Smith to pay the missing 5000 p later.
2. If Brownargues that Smith didn’t has to go to holiday
- we can argue that: due to the agreement on 20000 p., Smith wasn’t supposed to pay the additional 5000ptherefore he went in holiday
- or that everything what happens after the agreement is not relevant for the agreement itself. Smith could have gained the moneybecause of the location of his propriety.
3. Brown accepted the 20000 + bottle of wine
- the wine had a value of ???p which is equivalent to the “missing” 5000 p.