Explain how the doctrine of consideration relates to the doctrine of promissory estoppel.

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For one to understand the concept and depth of the doctrine of consideration we must first understand the complex nature of promissory estoppel and once we have grasped an understanding only then can we fully understand how the doctrine of consideration relates to the doctrine of promissory estoppel.

To define promissory estoppel “ where, by words or conduct, a person makes an unambiguous representation as to his future conduct, intending the representation to be relied on and to affect the legal relations between the parties, and the representee alters his position in reliance on it, the representor will be unable to act inconsistently with the representation if by doing so the representee would be prejudiced” (McKendrick, 2013, p. 94)

Another perspective on promissory estoppel as defined by Lord Birkenhead in Maclaine v Gatty [1921] 1 AC 376, 386, in the following terms: where A has by his words or conduct justified B in believing that a certain state of facts exists, and B has acted upon such belief to his prejudice, A is not permitted to affirm against B that a different state of facts existed at the same time” (McKendrick, 2013, p. 90). Essentially what Lord Birkenhead was implying was A could not enforce a term of a contract and then sue B for a breach if A had promised B they would not enforce the term. This is the basic foundation to promissory estoppel.

The development of Promissory Estoppel first arose by Denning J in Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130 (‘High Trees’). (Poole, Textbook on Contract Law, 2012) “In High Trees, Denning J suggested in an obiter dictum that where the conditions of promissory estoppel were satisfied, a creditor could not go back on a promise to accept less (and not to sue for the balance) where it would be inequitable to do so despite the absence of consideration to support the promise. In other words, the creditor could not go back on a promise to not to enforce payment of the whole sum where the promise had been relied upon” (Poole, Textbook on Contract Law, 2012, p. 145).

There are 5 requirements for promissory estoppel to be adhered to in order for there to be a successful claim and these elements go hand in hand with consideration.

Firstly “ the doctrine operates only where there is a clear and unequivocal representation that strict rights will not be enforced “ (Poole, Textbook on Contract Law, 2012, p. 147).  What the courts are saying here is that “ the promise or representation must be clear and unequivocal so that the promisor does not lose his rights simply because he has failed throughout to insist upon strict performance of the contract by the promisee “ (McKendrick, 2013, p. 95). This was established in the case of Woodhouse AC Israel Cocoa SA v Nigerian Produce Marketing Co Ltd [1972] AC 941, House Of Lords (Burrows, 2007, p. 140) whereby Viscount Dilhorne said in his speech with regards to this case  “ to found an estoppel, the representation must be clear and unequivocal.” (Burrows, 2007, p. 141). One thing to note here is , Within his speech he used the term “waiver” alongside estoppel, which sparks a debate as judges must be careful because that language is broad enough to refer to consideration (Burrows, 2007, p. 141) and this happens often enough whereby a judge will refer back to the doctrine consideration when illustrating a point on promissory estoppel in order to demonstrate that either these two doctrines can or cannot coincide together.

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The second element of promissory estoppel is “ that the promise or representation must have been relied upon by the promisee” (McKendrick, 2013, p. 95) this essentially means “ there is no need for detrimental reliance. Mere reliance (i.e. acting on) the promise is sufficient” (Burrows, 2007, p. 144) or an alternative school of though on that is that “it is sufficient to show that the promisee committed himself to a course of action which he would not otherwise have adopted “ (McKendrick, 2013, p. 95). This highly relates to the doctrine of consideration as a traditional definition of consideration ...

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