Pinnel's Case
Pinnel's Case, decided in 1602, is a foundational ruling in English contract law that established critical principles regarding the repayment of debts. The case arose from a dispute between creditor Pinnel and debtor Cole, who owed Pinnel eight pounds and ten shillings. Pinnel had agreed to accept a partial payment of five pounds and two shillings made early by Cole, but later attempted to sue for the full amount owed. The court ruled that partial payment of a debt does not constitute full satisfaction of that debt, even if there was a prior verbal agreement. This ruling implies that only under certain conditions—such as early payment or payment in a different form—can partial payment substitute for full payment. Despite Cole's defense that Pinnel had promised to forgive the remaining debt, the court noted deficiencies in Cole's argument, ultimately favoring Pinnel. The principles established in this case have persisted in English law, influencing later cases such as Foakes v Beer in 1883, which reinforced the precedents set by Pinnel's Case. The ruling remains a significant aspect of contract law, underscoring the importance of clear agreements regarding debt repayment.
On this Page
Subject Terms
Pinnel's Case
Pinnel's Case is a 1602 English court case that became a landmark decision in English contract law. It stipulated that payment of only part of an owed debt on the due date did not equal a payment in full. This rule applied even if a creditor had verbally agreed to accept partial payment on the due date in place of the whole. However, partial payment before the due date can substitute for full payment if the creditor has agreed to accept this. In Pinnel's Case, the creditor, Pinnel, had actually agreed to substitute an early partial payment for the full payment, and Pinnel's attempt to sue his debtor, Cole, for the full debt should have failed. However, Cole's defense was faulty, and Pinnel won the case. The decision in Pinnel's Case remained a relevant point in English law into the twenty-first century.
Overview
Pinnel's Case was an early milestone in English contract law. This branch of law focuses on the legal implications of the terms of contracts agreed to by two or more parties. Contracts generally feature several elements that must be present if an agreement is to be considered legally enforceable. These elements include an offer, acceptance of the offer, consideration, and intent to establish a legal relationship. Consideration refers to objects of value that are exchanged by the parties to a contract. If contracts are formed this way, the parties to the contracts can bring legal action against one another for violating the agreement's terms.
The 1602 Pinnel's Case created an important precedent in English contract law regarding the repayment of debts owed under the terms of a contract. The case arose from a disagreement between Pinnel, a creditor, and Cole, Pinnel's debtor. Cole owed Pinnel eight pounds and ten shillings by November 11, 1600. However, Pinnel claimed that Cole could avoid paying the full debt if he paid five pounds, two shillings, and several pennies by October 1, 1600. Cole did this, and Pinnel accepted the payment.
Pinnel later sued Cole for the entire amount owed. The court believed that partial payment could not be legally viewed as consideration. At the same time, the court ruled that fair consideration could also be tendered under special circumstances. These included paying a partial debt on an earlier date than the due date or by paying in chattel, or property such as livestock. Cole contended that Pinnel had in fact vowed to forgive the full debt for a partial payment made early. According to the court's ruling, this made Pinnel's vow legally enforceable. In the end, however, Pinnel won the case because Cole had insufficiently defended his position to the court; Pinnel had essentially won by default.
British courts upheld the decision in Pinnel's Case in 1883 in Foakes v Beer. Julia Beer had ordered John Weston Foakes to pay her the money he owed her. Foakes claimed he needed time to repay the full amount. Beer agreed that Foakes could repay one large amount immediately and the rest by regular installments. Foakes eventually paid the full amount, but he had not included interest, to which Beer was entitled. The United Kingdom's House of Lords ruled that Foakes was to pay Beer the interest, citing Pinnel's Case as precedent. The judgment in Pinnel's Case remains part of English contract law.
Bibliography
Andrews, Neil. Contract Law. Cambridge UP, 2015, p. 134.
Burnham, Scott J. "Contract Law for Dummies Cheat Sheet." Dummies, www.dummies.com/education/politics-government/contract-law-for-dummies-cheat-sheet/. Accessed 6 Nov. 2017.
"Consideration Law Lecture." LawTeacher, www.lawteacher.net/lecture-notes/consideration-lecture-2.php. Accessed 6 Nov. 2017.
"Contract." Cornell Law School, www.law.cornell.edu/wex/contract. Accessed 6 Nov. 2017.
"Elements of a Contract." University of New Mexico, jec.unm.edu/education/online-training/contract-law-tutorial/contract-fundamentals-part-2. Accessed 6 Nov. 2017.
"Foakes v. Beer (1883) LR 9 App Cas 605." LawTeacher, www.lawteacher.net/cases/foakes-v-beer.php. Accessed 6 Nov. 2017.
Kodilinye, Gilbert, and Maria Kodilinye. Commonwealth Caribbean Contract Law. Routledge, 2014, p. 39.
Stone, Richard, and James Devenney. Text, Cases and Materials on Contract Law. Routledge, 2017, p. 102.