(a) A owes B Shs. 5,000 which he has failed to pay. B promises a rebate of Shs. 1,000, if A pays the balance at once. A pays Shs. 4,000 in full settlement and has obtained a receipt for it. Subsequently B demands the balance of Shs. 1,000. Advise A.

(a) Payment of a smaller sum in lieu of a larger sum, by the debtor, does not operate to discharge the whole debt. The only exceptions to this rule are that where the debtor pays a smaller sum at the request of the creditor before a larger sum is due, or pays something different in kind. In this problem before us it is quite clear that B accepted a lesser sum from A after the larger sum has already become due. It is therefore stated that A is still under legal obligation to pay the balance of Sh. 1,000 to B. (Pinnel’s case Rule).