Facts
- Cole owed Pinnel a fixed liquidated sum of £8 10s, payable on a date expressly agreed by the parties.
- Shortly before that date, Pinnel asked Cole to make an earlier remittance.
- In response, Cole tendered £5 2s 6d—approximately two-thirds of the total—on the earlier date requested.
- Pinnel accepted the money when it was offered. No deed, sealed release, or written accord and satisfaction was executed at the time of payment.
- Cole subsequently claimed that Pinnel’s receipt of the lesser sum, coupled with the creditor’s request for early payment, operated as a full discharge of the debt.
- Pinnel denied any such discharge and commenced an action to recover the unpaid balance of £3 7s 6d.
Issues
- Under the common-law doctrine of consideration, can the payment of a lesser monetary sum ever extinguish a larger liquidated debt?
- If the debtor confers a benefit qualitatively different from the original promise—such as advancing the date of payment, delivering goods, or providing some other value—does that difference amount to fresh consideration sufficient to bind the creditor?
- Where the creditor voluntarily receives and retains the lesser payment, does that conduct alone constitute a legally enforceable waiver, or is additional consideration still required?
Decision
- The court restated the general rule: payment of a smaller sum on the date originally due cannot, without more, satisfy a greater debt. A debtor who merely performs part of an existing contractual duty provides nothing of legal value beyond what is already owed.
- Nevertheless, an identified exception was recognised. If the creditor, for his own benefit, requests something different in kind, time, or place, and the debtor supplies that difference, the law will treat the variation as good consideration.
- Applying that principle, the court held that Cole’s early payment, made specifically at Pinnel’s solicitation, conveyed a practical and legal benefit to the creditor—namely, accelerated receipt of funds. That benefit was not Pinnel’s entitlement under the original bargain; it was an additional advantage.
- Consequently, the early payment constituted fresh consideration, and the debt was treated as fully discharged. Pinnel’s claim for the remaining balance failed.
Legal Principles
- Consideration requires the promisee to incur a detriment or the promisor to receive a benefit that is distinct from existing obligations. Performing part of a pre-existing duty, in identical form and at the contractually appointed time, lacks that distinct element.
- A lesser sum paid at or after the due date will not satisfy the whole unless supported by one of three recognised alternatives:
- Earlier payment at the creditor’s request;
- Payment at a different place if that place confers a benefit or convenience to the creditor;
- Payment in a different form (e.g., chattel or negotiable instrument) accepted in substitution for money.
- The judgment famously illustrated the principle with the example that a “horse, hawk, or robe” might, if bargained for, supply the necessary consideration to extinguish a larger monetary claim.
- The case reinforced the rigidity of the consideration doctrine while foreshadowing equitable departures—later labelled promissory estoppel—that would, centuries later, soften the rule where reliance and fairness demand.
- Despite such equitable evolution, Pinnel’s Case remains authoritative at common law: absent fresh consideration or a deed, part-payment does not release the debtor.
Conclusion
Pinnel v Cole thus stands as a foundational authority on consideration. It draws a clear dividing line between mere partial performance—insufficient to discharge—and a varied performance voluntarily requested by the creditor, which supplies fresh consideration. By identifying and applying that exception, the court held that Cole’s timely advance payment satisfied the entire indebtedness, precluding Pinnel from recovering the balance.
