Foakes v Beer [1884]: Can You Avoid Interest on a Judgment?

Foakes v Beer (1884) deals with whether part-payment of a debt can legally satisfy the whole debt without fresh consideration. Here is a clean and structured analysis of the case.

• Court / Date: House of Lords, 16 May 1884.
• Citation: (1884) 9 App Cas 605; [1884] UKHL 1; (1883-84) LR 9 App Cas 605
• Judges / Law Lords: Earl of Selborne L.C., Lord Blackburn, Lord Watson, Lord FitzGerald
• Legal Focus: Consideration, Part-payment of debts, Statutory interest on judgments

Key Facts: Foakes v Beer

Dr. Foakes had a judgment against him for £2,090 19s (principal + costs). He and Mrs. Beer executed a written agreement: Foakes would pay £500 immediately, then £150 every half-year until the whole £2,090 19s was paid; in return Mrs. Beer agreed she “would not take any proceedings whatever on the judgment” so long as those instalments were paid. The dispute arose whether that agreement also waived the statutory interest that ran on the judgment (4% per annum under 1 & 2 Vict. c.110 s.17) — i.e., whether payment of the instalments in the described manner extinguished Mrs. Beer’s right to recover interest.

Legal Issue

Can a creditor, by a parol (or simple written) agreement to accept part-payments over time, be bound to waive interest (or the residue) where the creditor receives no fresh consideration?

Does part payment by a debtor constitute consideration to support an agreement to discharge the whole of a liquidated debt?

Decision in Foakes v Beer

The House of Lords affirmed the Court of Appeal. The agreement did not discharge the statutory interest.

A creditor’s promise to accept part-payments (without fresh consideration or a deed) is nudum pactum and not enforceable to extinguish the remainder of a liquidated debt.

The longstanding rule in Pinnel’s Case and Cumber v Wane — that payment of a lesser sum cannot satisfy a greater where the debt is liquidated unless there is new consideration or a seal/deed — was treated as still good law.

Reasoning

The operative wording promised only that the creditor “will not take any proceedings …” if instalments were paid; the document did not expressly release interest.

Even if that wording could be read to mean full satisfaction on completion of instalments, the agreement lacked consideration: Foakes was already under an antecedent obligation to pay the judgment, so his promise to make the same payments could not constitute new consideration to support relinquishment of interest.

The court declined to overturn or depart from the principle in Pinnel’s Case.

Significance

This case is often cited in contract/credit law when discussing accord and satisfaction, consideration, and the formalities needed to discharge a judgment debt or liquidated obligation.

It affirmed the rule that part payments of a liquidated debt do not discharge the whole unless accompanied by fresh consideration, a seal/deed, or some collateral advantage (e.g., payment earlier than due, payment at a different place, or acceptance of a different form of security such as negotiable instrument).

You may refer to the full case judgment here:

https://www.bailii.org/cgi-bin/format.cgi?doc=/uk/cases/UKHL/1884/1.html

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