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A critical review on Foakes v Beer: Reform of common law at the expense of equity, Alexander Trukhtanov, Law. Quarterly .Review. 2008, 124 (Jul), 364-368

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Introduction

A critical review on 'Foakes v Beer: Reform of common law at the expense of equity, Alexander Trukhtanov, Law. Quarterly .Review. 2008, 124 (Jul), 364-368 Under English Law, it has always been required that every contract be supported by consideration. Initially, contract, acceptance and certainty are the standard requirements which prescribe the skeletal structure of a contract's formation. The dominant theory of consideration has provided agreements with the elements of a bargain, thus distinguishing contracts from gifts; and consequently a promise made by one person to another is not legally enforceable. In addition, the latter unless he has provided some promise or act in return. Taken from Currie v Misa 1 the principle of consideration was defined as: A valuable consideration, in the sense of the law, may consist either in some right, interest, profit, or benefit accruing to one party or some forbearance, detriment, loss or responsibility, given suffered or undertaken by the other. 2 However, in most recent times the doctrine has come under criticism (for example, Lord Edward Coke on Pinnel's case pleaded that '...by no satisfaction can a lesser sum on part-payment can be approval to the plaintiff for a greater sum' 3 however Lord Blackburn criticised this judgement), taken from the article of 'Foakes v Beer: Reform of common law at the expense of equity, Alexander Trukhtanov' 4 to which the author has outlined the critique of the common law and to see what has been the subject of the possible reform. ...read more.

Middle

However, the rule is open to criticisms and a means of evading it has been developed under the equitable principle of promissory estoppel. The author includes the judgement made by Lord Denning in Central London Property Trust v High Trees House 11 to put forward a different solution to the problem of part-payment. Denning J, established the equitable principle of promissory estoppel by fusing two existing equitable principles in the case of Hughes v Metropolitan Railway Co. Ltd .12 This enabled Lord Denning to avoid having to follow the principle of Foakes v Beer. The author states that '...Lord Denning referred to such application of the doctrine as an already established practice...' and '...opened the door to applying the equitable doctrine...'13 The statement offered possibilities of a broader doctrine which can be summarised where one party, by words made a promise to the other which was intended to affect the legal relations between them; and the other party had taken him at his words cannot afterwards be allowed to revert to his previous legal relations. This was Lord Denning's solution to the problem posed in Foakes. The ingenuity of his approach cannot be questioned. In suggesting the doctrine of promissory estoppel, Denning was concerned primarily with finding a solution to the problems of part payment of a debt, by itself does not create a cause of action. If it did, it would be difficult to reconcile with the doctrine of consideration.14 Moreover, the author moves on to incorporate the case of Collier v P & MJ Wright (Holdings) ...read more.

Conclusion

This would provide justice on in to show full consideration of the contract, and on the defence of promissory estoppel the creditor would be bound to accept the full satisfaction of the whole debt. Nevertheless, the doctrine of estoppel is still questionable as there is still some confusion over the precise effect of the equitable principle on the rights of the promisor. Hence, it is possible to argue that promissory estoppel has the effect of extinguishing existing obligations, but merely suspending future obligations until reasonable notice is given by the promisor of his intention to resume his strict rights. One other factor mentioned in the review is that whether the debtor not paying has a position in reliance on the creditor's promise or whether the creditor's reliance on his promise would affect the debtor, would nevertheless be inequitable. It can appear that the doctrine of promissory estoppel can extinguish the future rights of the promisor, even after he has given notice of his intention.21 In addition, the author concludes the review by the latter of the characteristics of both cases. It states that the rule in Foakes can be injustice. In conclusion, The principle in Foakes can be harsh on a creditor who, believing they have extinguished their debt, finds that they are still liable for the full amount. However, is it desirable that this be replaced by a principle that allows unscrupulous businessmen to renege on their contractual duties and then use performance of their existing duty as consideration? Surely the proposed extension of promissory estoppel, above, would be a suitable compromise. ...read more.

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