Pinnel's Case

Facts

• Pinnel sued Cole for a debt of £8 10s due on 11 November
• Cole paid £5 2s 6d on 1 October (before the due date) and Pinnel accepted it
• Pinnel sued for the remaining £3 7s 6d
• Cole argued the earlier payment was accepted in full satisfaction

Issue

1. Whether payment of a lesser sum can ever discharge a debt for a greater sum?

Held

• The Court stated the general rule: "Payment of a lesser sum on the day in satisfaction of a greater, cannot be any satisfaction for the whole, because it appears to the Judges that by no possibility, a lesser sum can be a satisfaction to the plaintiff for a greater sum"
• However, exceptions exist where fresh consideration supplements the part-payment:
• Payment before the due date (benefit of early payment)
• Payment at a different place at the creditor's request
• Payment with a chattel ("the gift of a horse, hawk, or robe, etc. in satisfaction is good")

Ratio Decidendi

A lesser sum of money cannot logically satisfy a greater sum because money has a fixed value: £5 can never equal £8. But if something qualitatively different is added (time advantage, different location, or a chattel of uncertain value), the law treats this as new consideration sufficient to discharge the larger obligation. The rule is about the nature of the consideration, not the adequacy.