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Promissory estoppel and consideration

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Introduction

'Promissory estoppel is a necessary supplement to the doctrine of consideration, because it enables courts to enforce promises that have been relied upon even though the promise was not part of an exchange.' Discuss Promissory estoppel is of a different nature from the doctrine of consideration. Some may contend that it is unnecessary to have promissory estoppel since consideration will suffice for justice; there are also economic arguments that extra costs may be involved to disclaim promissory intentions in a gratuitous promisei. I however, disagree and the reasons are as follow. Doctrine of consideration In order for a contract to be valid, consideration has to be present. It is one of the tests of legal enforceability. The basic idea is that of 'reciprocity'ii, in order to acquire the right to enforce an undertaking, a party must undertake or actually give something stipulated by the other as the price. iii The requirement of nexus must be met. Firstly, consideration must move from the promisee, but it need not move to the promisor. A third party can enforce a contract made for his benefit. iv Secondly, consideration has to be requested by the promisor. In Combe v. Combev, the court held that the husband had not requested the wife not to apply for maintenance and thus the promise to pay wasn't enforceable. Thirdly, past consideration is not good consideration. The consideration was already completed before the promise is made, nothing new is given in return. ...read more.

Middle

The House of Lords held that the tenant was entitled to equitable relief against forfeiture on the ground that the running of the six-month period was suspended during the negotiations to purchase the lease and did not recommence until the negotiations broke down. Hughes was resurrected by Denning J in the prominent case of Central London Property Ltd v. High Trees House Ltdxviii. In 1937 the claimants(C) let a block of flats in London to the defendants(H) at an annual rent of £2500. In 1940, the war caused evacuation of people and the defendant could not sublet enough flats to generate the rent so the claimant agreed to halve the rent. When the property market returned to normal and the flats were fully let, the claimant requested and the defendant refused to resume payment of the entire rent. Denning J held that the claimants were entitled to demand the entire rent from the date of their notice in 1945. This means that the claimant would be estopped from back payment of the rent forgone between 1940 and 1945 had they sought it. Both cases above shows the equitable principle and illustrates the protection of promisees who have relied on promises given by promisors. The five elements of promissory estoppel that construct a threshold so that not all promises could be enforced will be discussed here. The first is that there must be a clear and unequivocal promise or representation. ...read more.

Conclusion

It is necessary to have promissory estoppel since as shown above, consideration does not cover such grounds. Equity and justice should be the priority of the court and the doctrine of promissory estoppel can uphold this. i Posner, Economic Analysis of Law (2nd edn, 1977, pp 67-70 ii E. McKendrick, Contract Law, Palgrave Macmillan 2007, pp 85 iii M. Chen-Wishart, Contract Law, OUP 2007, pp 124 iv Contract (Rights of Third Parties) Act 1999 16.1.4 v Combe v. Combe [1951] 2KB 215 (CA) vi Eastwood v. Kenyon [1840] 11 A & E 438 vii M. Chen-Wishart, Contract Law, OUP 2007, pp 129 viii E. McKendrick, Contract Law, Palgrave Macmillan 2007, pp 107 ix Ward v. Byham [1956] 2 ALL ER 318 x Shadwell v. Shadwell [1860] 9 CBNS 159, 30 LJCP 145 xi Stilk v. Myrick [1809] 2 Camp 317, 170 ER 851; 6Esp 129, 170 ER 851, King's Bench xii Williams v. Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1; [1990] 1 ALL ER 512, CA xiii M. Chen-Wishart, Contract Law, OUP 2007, pp 154 xiv Foakes v. Beer (1884) [1881-5] ALL ER Rep 106, HL xv Re Selectmove Ltd [1994] BCC 349, [1995] 1 WLR 474 xvi M. Chen-Wishart, Contract Law, OUP 2007, pp 170 xvii Hughes v. Metropolitan Railway Co [1877] 2 App Cas 439 xviii Central London Property Ltd v. High Trees House Ltd [1947] KB 130 xix M. Chen-Wishart, Contract Law, OUP 2007, pp 171 xx E. McKendrick, Contract Law, Palgrave Macmillan 2007, pp 118 xxi Waltons Stores (interstate) Ltd v. Maher [1988] 164 CLR 387 ...read more.

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