Pinnel’s Case

As part of my ongoing studies of Contract, I have to do a couple of past year questions and this is question 2b.

Pinnel’s Case, is a landmark case that decided on the issue of part performance – whether part performance of a contract can constitute full satisfaction. In it, a rule was established – Pinnel’s Rule – that essentially states that part performance cannot constitute full satisfaction unless there is additional consideration in place.

Essentially, what Pinnel’s Rule does with the additional consideration is to put a new contract in place of the old contract. The offer to settle in full by making part payment must be accepted by the other party with new consideration.

For example, a person may make part payment to settle a debt in full if they paid it early as an early payment would constitute additional consideration.

However, the situation in S.64 of the Malaysian Contract Act is a little different on this. It allows for full satisfaction with only part payment as established in the case of Kerpa Singh v Bariam Singh. Not only does it not require any additional consideration to be made, it does not even require an agreement of part-payment to be made between the parties.

Yow! Our law has many peculiarities and this is one of it.

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Shawn Tan

Chip Doctor, Chartered/Professional Engineer, Entrepreneur, Law Graduate.

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