Legal Principles and Key Points
- In the case of Foakes v Beer 1884 app cas 605, it was held that a promise to accept less than someone is entitled to under a pre-existing contract is not binding for want of consideration.
Facts of the Case
- C gained a court judgment entitling her to a sum of money from D (plus interest)
- C agree to let go the interest and any proceedings claim to the interest of C paid £500 immediately and £150 on two occasions each year till the whole sum was paid.
- Once the total sum was paid, C brought an action to claim the interest.
- D then argued that she was bound by her previous promise not to claim the interest.
Issues in Foakes v Beer 1884 app cas 605
- Was c entitled to the interest?
- Was there calid consideration to bind C to the promise.
Held by House of Lords
- C entitled to the interest.
- Here a lesser sum cannot be satisfaction of a greater sum.
- Immediate payment of a lesser sum can be of greater value than insisting on full payment, even when the debtor is solvent.
- “In relation to a judgment debt payable immediately, and on which the creditor is entitled to have execution, is the payment by the debtor of a part a sufficient consideration to support a parol agreement by the judgment creditor not to take any proceedings whatever on the judgment for the residue? In my opinion it is not; and I think, therefore, that the judgment of the Court of Appeal should be affirmed”. [conclusion]