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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.

Extracts from this essay...

Introduction

Contract Law Mark: 68% Q2. '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. Denning LJ's profession: "the doctrine of consideration is too firmly fixed to be overthrown by a side-wind" indicates that it is the cardinal badge of enforceability in the formulation and variation of contracts in English common law. However, the orthodox Stilk v Myrik1 interpretation of the doctrine is particularly rigid. Its application can sometimes manifest inequity. Promissory estoppel can be viewed as supplementary to consideration as it remedies inequity by allowing promises that have been relied upon to be enforced without consideration. However, it can hardly be considered a supplement that is necessary. In actuality, the role of estoppel is a limited one that does not guarantee the absolute enforcement of all promises unsupported by consideration that have been relied upon. Firstly, certain conditions must be fulfilled for the estoppel to be applied. Secondly, for promissory estoppel to coexist with consideration, estoppel cannot be used offensively. Also, there are instances where the application of estoppel has led to irreconcilability with binding laws of consideration. Contrary to its supplementary nature, instances like these exemplify how estoppel can possibly contradict the doctrine of consideration altogether.

Middle

3. The promisee must have relied on the promise or representation7. It was held that in Hayes v. Plantations Steel Co8, Plantations' promise to take care of Hayes post-retirement did not induce reliance by Hayes because he had decided to retire before any promise that he would receive a pension was made. The promise did not induce Hayes action or forbearance. Thus, without reliance, estoppel cannot apply despite the inequity caused by a sudden cease of pension after 3 years of payment. 4. It must be inequitable for the promisor to go back upon his promise. In D & C Builders v Rees9, the promisee was proven to have extracted the promise to accept a reduced sum by duress and because there was decided to be "no inequity in resiling". This case also highlights that estoppel can only enforce unsupported promises not part of the exchange only if they were made in good faith and were not fraudulent or extorted under duress. This good faith criterion can be perceived as another limiting factor in enforcing these promises. Additionally, the fact that promissory estoppel cannot be used offensively reiterates its rangebound capacity in enforcing such promises. It can only function defensively to prevent the promisor from enforcing his original rights relinquished. This is demonstrated in Combe v Combe10 where Denning LJ held that estoppel could not be create a cause of action where was none.

Conclusion

App. 128, 506 N.W.2d 556 (1993) 7 As Goff J explained in The Post Chaser [1982]: "it is not necessary to show detriment... it would be open to the Court, in any particular case, to infer from the circumstances of the case that the representee must have conducted his affairs in such a way that it would be inequitable for the representor to enforce his rights, or to do so without reasonable notice" 8 438 A.2d 1091, 1094 (R.I. 1982) 9 [1965] 2 QB 617 10 [1951] 2 KB 215 11 [2007] EWCA Civ 1329 12 [1884] 9 App Cas 605 13 Referenced also in D & C Builders and Couldery v Bartrum 14 Russell LJ : 'in the late twentieth century I do not believe that the rigid approach to the concept of consideration to be found in Stilk v. Myrick is either necessary or desirable. Consideration there must still be but, in my judgment, the courts nowadays should be more ready to find its existence so as to reflect the intention of the parties to the contract where the bargaining powers are not unequal and where the finding of consideration reflects the intention of the parties.' 15 [1991] 1 QB 1, 18 16 See Adam Opel GmbH v Mitras Automotive (UK) Ltd and Simon Container Machinery Ltd v Emba Machinery AB 17 Ward v. Byham [1956] 1 WLR 496

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