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FactsEdit

Foot owed Rawlings money for several debts. Rawlings was quite old and realized that the current agreement would make it hard for him to enjoy the money, and therefore offered a new agreement whereby the appellant would pay less money monthly as long as he gave post-dated cheques every six months for the following six months. If he performed this, then the respondent would not sue. Both parties signed this agreement on July 17, 1958. Foot followed this agreement, however after cashing the November 1960 cheque an action was brought for the balance.

IssueEdit

  1. Was there sufficient consideration in the substituted contract for it to be binding?

DecisionEdit

Appeal is allowed; the new agreement may continue and the respondent cannot sue unless the appellant fails to keep up the payments.

ReasonsEdit

After a careful review of the case law the judge decides that the respondent relinquished his right to sue when he entered into the substitute agreement. The consideration in the agreement was the appellant's agreement to provide the post dated cheques in advance purely for the benefit of the respondent so that he could enjoy the money before his death.

RatioEdit

  • Accepting terms that benefit the creditor for convenience can amount to consideration.
  • A negotiable instrument such as a cheque, or an object of a value less than the debt, can be consideration even if the amount is less then the cash debt.

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