Pinnel’s Case (1602) 5 Co Rep 117
Whether part payment of a debt can be good consideration.
The defendant, Cole, owed the plaintiff, Pinnel, the sum of £8 10s. Pinnel sued Cole for recovery of the debt. Cole had, at Pinnel’s request, paid £5 2s 6d one month before the debt was due to be paid and stated that they had an agreement that this part payment would discharge the entire debt.
The defendant argued that the plaintiff had accepted partial payment of the debt as satisfaction of the whole. However, it was a general rule that payment of a lesser sum than that which was owed in satisfaction of a debt could not discharge the obligation to repay the whole amount.
The court confirmed the general rule that part payment of a debt cannot be satisfaction for the whole. However, since the payment had been made early this was sufficient to discharge he debt. Lord Coke said (at 1117a):
‘Payment of a lesser sum on the day in satisfaction of a greater sum cannot be any satisfaction of the whole... but the gift of a horse, hawk, or robe etc. in satisfaction is good. For it shall be intended that a hawk, horse, or robe, etc. might be more beneficial to the plaintiff than the money’
Therefore, by paying some money early the defendant had provided the plaintiff with a further benefit and had not just repaid the money which he already owed. Consequently, this was good consideration, and the court found for the defendant.