Based on the situation given between Angelina and Laura, there are some similarities

compared to the cases law under part payment of debt. Part payment of debt is a type of
consideration in which the creditor will get benefit in the contract. However, it does not mean
there is no payment at all to the lender. It is also known as partial payment in which the
payment is less than the total amount owned from the owner. Part payment of debt is having a
contrast in between Contracts Act 1950 and English common law. Under English common
law, the general rule of part payment is that the payment of smaller amount is not in
satisfaction of the obligation to pay larger amount.
[Link]
of-CA-1950-Every-promise-may/ The rule was first defined in the Pinnel’s case (1602) and is
stated that part payment of debt is not a good consideration to dispense the balance of debt.
However, this rule is not application under Malaysia Contracts Act (1950). This is due to the
Section 64 of Contracts Act 1950 was stated that “may accept instead of it any satisfaction
which he thinks fit”. [Link]
students/acca/f4/exampapers/mys/[Link] As a result, part payment of debt
cannot be accepted the satisfaction under English Law, but it can be accepted under Contracts
Act. Based on the question given, we have decided to apply the rule of English common law
whereby Angelina is contracted to pay Laura the RM20. This is due to there are some cases
law similar to the scenario of the question given.

First of all, in Pannel’s Case (1602), the plaintiff, Pinnel sued the defendant, Cole,
because Cole owed Pinnel with the sum £8 10s. However, Cole was argued that with Pinnel’s
request, Cole had paid him £5 2s 6d before the due date of debt to be paid. He also claimed
that there was an agreement had been made between them that Pinnel had accepted this
amount as the full settlement of the whole debt. However, Pinnel brought the case to the
court. The court held that a smaller sum cannot satisfy a larger sum unless the payment was
made before due, payment was made at different place or it is made in a different mode other
than the money. Therefore, Pinnel can sue Cole for the rest of the debts because Cole did not
give any consideration for Pinnel’s promise to accept the part-payment, and the promise was
not legally binding. Hence, Cole was required to pay back the remaining amount as Cole had
not pleaded the defence properly.

Furthermore, the given situation is also similar to the case of Foakes v Beer (1884). In
fact, Dr Foakes, the person who owed £2,000 to Mrs Beer at the beginning. Foakes stated that
he would pay him £500 at once and the remaining amount would be paid by instalments. It
became the criteria of partial payment. It was agreed by Beer and Beer stated that she would
not force for the remaining payment when Foakes was sustainable to pay the instalments. In
point of fact, there was no agreement of the payment interest had been made whether or not
Foakes to pay the interest to Beer. All the payments had been made by the Foakes without
paying any interest. Therefore, Beer took an action to Foakes for the interest of the payment.
The court held the promise was not legally binding as Foakes did not provide any
consideration. The consideration refers to the willingness of Foakes to settle the overall
payment in which the instalments must include the interest of the debt. The House of Lords
stated that it must contain the independent benefit which able to replace the less sum of
payment. Therefore, a valuable consideration only can be formed. As a result, Foakes has the
obligation to pay back the interest to Beer. The rules of Pinnel’s Case (1602) was applied to
the case of Foakes v Beer which the less amount of the payment cannot be the satisfaction as
the whole settlement. Foakes did not provide a good consideration to become the satisfaction
of the whole. Therefore, the interest that did not pay by the Foakes cannot be the full
settlement of the debt.

Besides that, based on the case of D&C Builders v Rees (1966), D&C Builders
Company would like to get back the balance from Mr and Ms Rees. D&C Builders is a small
building company which will carry out building work for Rees at 746 pounds. However, there
was only 250 pounds paid by Mr Rees. As the construction work was in processing, second
bill was issued with a sum owing of 482 pounds. The Builders met some financial difficulties
and hence funds was requested from Rees again. Rees offered them £300 in full settlement
and stated that if this was not accepted, they would get
nothing[Link] Hence, the company
agreed reluctantly and was not able to receive fully balance from Rees. The court held that
the alleged settlement was not binding on the plaintiffs. Mr and Ms Rees appealed to the
Court of Appeal who dismissed the appeal and held that the purported settlement did not bar
the company from recovering the balance of the debt. As Mrs Rees realized and took
advantage of their financial situation, builders had to accept the reduced amount. Therefore,
the acceptance caused by a threat is not equal to reconciliation.

Further in the case of Re Selectmove Ltd (1995), partial payment of debt is not a valid
consideration. In fact, a company, Re Selectmove owed Inland Revenue large amount of
debt. It alleged that Selectmove could pay off its tax liabilities by instalments. After a few
months, Inland Revenue demanded immediate payment in full and it failed to receive this
payment. Selectmove resisted that previous arrangements for payment by instalment
constituted a binding contract. Then, Selectmove sued the Inland Revenue for breach of
contract. The court held that the Inland Revenue did not bound by the acceptance of payment
by instalments. This is because Selectmove does not provide any consideration and there is
also no additional consideration given by the Selectmove. Therefore, liquidation was needed
to be done by Selectmove.

In conclusion, although Laura had accepted the voucher as a full payment but Laura
was still able to claim back that RM20. This is because only Angelina gain benefits but Laura
gain detriments. Laura provided consideration by looking after Angelina’s house but
Angelina only gave Laura RM80 shopping voucher to replace the RM100 as the promise.
According to part payment under English law, payment of a lesser sum cannot be accepted as
satisfaction. Thus, part payment of debt is not sufficient consideration. Therefore, Angelina
needed to pay Laura RM20 or Angelina should give Laura some additional consideration
together with the RM80 shopping voucher instead of only giving the RM80 shopping
voucher. However, if Angelina provided somethings such as gift basket together with RM80
voucher before the due date, and if this circumstance Laura agrees to accept the part payment
as the full settlement for the debts, this promise will be binding because Angelina has given a
good consideration for her and this consideration is valid.

Other than part payment of debt, there are also some clauses able to prove that
Angelina is contracted to pay Laura the RM20. Laura had done the thing at the desire of the
promisor, which she had kept an eye for Angelina’s house. Angelina has executory
consideration which is yet to be given or performed and Laura has executed consideration
which has been completed by a party at time of the contract. Therefore, Laura was entitled to
recover back all the debts from Angelina. Moreover, it also can be said that this was a
unilateral contract that was accepted by Laura by conducting the task. So, there was no
reasons for Angelina can revoke or withdrawal this offer that has commenced by
performance, and hence she will breach the contract if she revokes the contract.