(a)
The issue is whether part payment before due date is consideration for variation of
contract.
Fresh consideration is required for the variation of contract( Stilk v Myrick1) where part
payment of a debt is not sufficient consideration( Pinnel’s Case2) excepts it confers practical
benefit to the promisor(Williams v Roffey3).
Benny promises to pay a lesser sum one day earlier than required. Since early repayment
is an additional duty provided by Benny as he is not contractually obliged to do so and it
confers a practical benefit to Daryl by enabling him to receive money earlier, it is a valid
consideration for the variation.
The contract has been varied effectively. David is not entitled to recover $1000.
(b)
The issue is whether past consideration constitutes a valid consideration for the variation
of contract.
Fresh consideration is required for the variation of contract( Stilk v Myrick4). Past
consideration is not a good consideration( Re McArdle5) unless done at the request of the
promisor with the knowledge that payment would be made, the payment if had been promised
in advance must be legally recoverable( Lampleigh v Brathwaite6).
Benny’s decorating work was not done at the request of Daryl, nor did Daryl promise him
in advance that the debt would be discharged in consideration of it. Having done( March 12)
before the execution of promise( March 15), it is a past consideration. The variation of
1
(1809) 170 ER 1168
2
(1602) 5 Co Rep 117
3
(1991) 1 QB 1
4
(1809) 170 ER 1168
5
[1951] Ch 669
6
(1615) Hob I05
contract is invalid without sufficient consideration.
Daryl is entitled to recover $10000 since the variation of contract is not binding.
(c)
The issue is whether the bottle of wine constitutes sufficient consideration for the
variation.
Variation of contract is not effective unless supported by fresh consideration( Stilk v
Myrick7), including payment in kind( Pinnel’s Case8), at the request of the promisor ( cf. Ellis
v Chief Adjudication Officer9). Part payment of a debt is not consideration( Pinnel’s Case10)
unless it confers practical benefit to the promisor.
Part payment of debt by Benny is not consideration as it is part of his existing duty owed
to Daryl. Whether or not the bottle of wine confers a valid consideration depends on whether
it is given at the request of Daryl. If (1) it is not given at his request, it is not a consideration;
if (2) it is given at his request, it is a consideration as wine is a payment in kind which confers
practical benefits to Daryl.
It is not mentioned here that Daryl requested Benny to give him a bottle of wine.
Scenario (1) might be a more possible situation. Applying the general rule, the variation is not
effective as no valid consideration is provided.
Daryl is entitled to recover $1000 as the original contract is not varied.
(d)
The issues are (1) whether Benny may nevertheless raise the defence of promissory
estoppel and if yes, (2) whether it is equitable for Daryl to recover $10000.
7
(1809) 170 ER 1168
8
(1602) 5 Co Rep 117
9
[1998] 1 F.L.R. 184.
10
(1602) 5 Co Rep 117
Issue (1)
The operation of equitable doctrine subjects to three requirements: (i) there must be a
clear promise or representation by one party( Huhges v Metropolitan Ry11); (ii) the promisee
must have relied upon the promise( Collier v Wright12); (iii) it must be inequitable for the
promisor to go back on the promise( D & C Builders Ltd v Rees13).
For requirement (i), Daryl makes no express promise that he will not insist on his strict
legal rights, but the implication of such a promise arises from their negotiations, inducing
Benny reasonably to believe that Daryl promises to accept the instalment terms. However, as
Benny fails to pay the first instalment, there is no reliance upon the promise and requirement
(ii) is not met. The equitable doctrine is not applicable in this circumstance and Benny cannot
raise the defence of promissory estoppel against Daryl.
Issue (2)
Under equitable doctrine, it is inequitable for the creditor to go back on his promise(
Collier v Wright14) when debtor makes part payment in reliance on his promise, subjects to
exception in which debtor fails to perform the promise to smaller amount( Re Selectmove15) or
when the promise is obtained under duress( D&C Builders v Rees16).
Since equitable doctrine does not apply in this case, it is equitable for Daryl to reassert
his claim for $10000. Daryl is entitled to recover $10000.
(784 words)
11
(1877) 2 App. Cas. 439
12
[2008] 1 WLR 643
13
[1966] 2 QB 617
14
[2008] 1 WLR 643
15
[1995] 1 W.L.R. 474 at 481
16
(1966) 2 QB 617