is an

English contract law English contract law is the body of law that regulates legally binding agreements in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countrie ...

case, concerning the doctrine of

consideration Consideration is a concept of English common law and is a necessity for simple contracts but not for special contracts (contracts by deed). The concept has been adopted by other common law jurisdictions. The court in '' Currie v Misa'' declar ...

, and part payments of debt.

Facts

Selectmove Ltd owed the

Inland Revenue The Inland Revenue was, until April 2005, a department of the British Government responsible for the collection of direct taxation, including income tax, national insurance contributions, capital gains tax, inheritance tax, corporation ...

substantial sums in outstanding tax and national insurance. The managing director, Mr ffooks, met with Mr Polland, from the Inland Revenue and said he would pay future tax as it fell due and the arrears at £1,000 a month. Mr Polland said he would have to check and would contact the managing director if it was unacceptable. Selectmove Ltd heard nothing until a £25,650 notice came in and a threat of a wind-up petition. Mr ffooks subsequently claimed that the Revenue had said he could repay less. The High Court held that even if that were found to be true, Mr Polland had not bound the Revenue, and there was no consideration for the varied agreement anyway.

Judgment

Peter Gibson LJ ( Stuart-Smith and Balcombe LJJ concurring) observed that '' Foakes v Beer'' precluded any variation of the agreement to repay the debt without good consideration, despite the recent decision in '' Williams v Roffey Bros Ltd''. Peter Gibson LJ stated that ‘it is clear… that a practical benefit of that nature is not good consideration in law’. As his Lordship put it, in forceful language,

Notes

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References

*E Peel, ‘Part Payment of a Debt is No Consideration’ (1994) 100 LQR 353 English contract case law Court of Appeal (England and Wales) cases 1993 in United Kingdom case law