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Decoding Judgements: Untangling the Rule in Pinnel's Case

28 July 2023 | CaseSnappy Team

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Welcome once again to "Decoding Judgements," by CaseSnappy, where we break down landmark court rulings into easily digestible segments. Today, we turn our attention to an era-defining verdict recorded in Pinnel's Case (1602) 5 Co Rep 117a that reshaped our understanding of debt, agreements, and the principle of 'consideration'.

A Disputed Deal: Facts of the Case

This case revolved around a monetary dispute between Pinnel and Cole. Pinnel had loaned Cole an amount of £8 and 10 shillings, however, Cole failed to repay it when due. A new agreement was made that Cole would discharge his debt by making partial payments totalling £5 and 4 pence. Nonetheless, Pinnel later sued Cole for the remainder of the original debt.

Consideration or Not: Issues in the Case

The crux of the matter rested on whether the agreement between Pinnel and Cole to accept reduced payment in full satisfaction of the original debt was legally binding. Pinnel argued that Cole had given no consideration for his promise to forgive the rest of the debt, while Cole insisted that the agreed partial payment was adequate.

A Debt Not Discharged: The Decision

The court ruled in favour of Pinnel, holding that partial payment of a debt does not constitute sufficient consideration for discharging the whole debt unless there is an additional factor such as a benefit to the creditor or some detriment suffered by the debtor. This principle, articulated as 'the rule in Pinnel's Case', asserted that payment of a lesser sum cannot be considered sufficient consideration for the discharge of the entire debt.

In the words of Coke CJ, "...payment of a lesser sum on the day in satisfaction of a greater, cannot be any satisfaction for the whole, because... a lesser sum can be no satisfaction to the plaintiff for a greater sum: but the gift of a horse, hawk, or robe, etc. in satisfaction is good."

CaseSnappy: Your Legal Encyclopedia

Through the prism of Pinnel's Case, we comprehend the pivotal legal principle of consideration in debt agreements. As always, we at CaseSnappy are committed to translating intricate legal proceedings into succinct summaries, benefiting law enthusiasts, professionals, and laymen alike.

Don't miss our upcoming edition of "Decoding Judgements" next week for more valuable case insights. Sign up to CaseSnappy for free to explore our comprehensive library of case summaries.

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