The strict common law rule is that a promise in addition to pre-existing legal relation is not enforceable if there is no consideration. This is exemplified in the Pinnel’s Case in which Lord Coke laid down that a payment of the debtor to the creditor of a lesser sum on the due day in satisfaction of the greater original sum cannot be consideration for the whole. This despite the creditor promised to relieve the debtor from the rest of the debt, the creditor is not bound by this settlement. He can sue the debtor the next day for the balance outstanding. The Pinnel-Doctrine has been reiterated by the House of Lords in Foakes v Beer. The creditor is basically allowed to break his promise. Similarly in Combes v Combes or in Stilk v Myrick the promises were not enforceable as they were not accompanied by consideration.
This unsatisfactory situation has been attempted to be resolved. Lord Cairns in Hughes v. Metropolitan Railway Co. and Lord Denning in Central London Property Trust Ltd. v High Trees House Ltd. tried introducing a change to the idea of consideration.
In the High Trees Case the plaintiff granted the defendants a lease for a certain amount per annum. During the war the amount has been reduced for the war time. After the war the plaintiff (the landlord) argued that the agreement reducing the rent was not supported by any consideration. The defendants relied on the reduced rent and on the agreement preventing the strict legal effects of the first contract from being enforced. Lord Denning held that the plaintiff was only entitled to the full rent after the war. The claim for the full rent for the war time has been dismissed despite lack of consideration due to the promise given.
So if one party modifies the liabilities of the other party, then he may be estopped from enforcing the original contract. In fact the promisee is protected from any claims against him. He can invoke the promise as a shield. Even if there is no consideration.
But are there situations, when a promise can be invoked to actually establish a cause of action?
The thin line between consideration and estoppel one could say also makes the thin line between estoppel being a shield or a sword. Estoppel merely may be invoked for avoiding the detriment the promisee would suffer if the promisor would depart from his promise. It secures a certain trust and reliance (Walton Stores v Maher). Whereas if the promise would be followed by consideration, then a new contract has been established/modification of the contract and one might be entitled to claim more than just the infidelity/reliance interest but also the expectation interest (Walton Stores v Maher).
Now if the promise is such of nature that it gets rid of possible legal defences built in a contract and the claimant wants to invoke this promise to defeat the once existing defence (c.f The Ion Case) estoppel is being used pro-actively. But is it a sword? Important is that estoppel is not being to used achieve the cause of action itself but to defeat a defence. If estoppel is being used to create the cause of action then estoppel cannot be invoked. However if the claimant relies on the estoppel to achieve parts of a recognised cause of action (c.f. The Henrik Sif Case) the question rises if this is permissible. In Stilk v Myrick the claimant cannot invoke the promise of the captain on the basis of estoppel, because the sailor would create the cause of the action. The common law is uncertain in these areas (McKendrick p.109).
The Charles Rickards v Oppenhaim Case may be an example of the doctrine of promissory estoppel being used by a plaintiff as a sword. Usually a seller may tender delivery after the date agreed originally relying on the buyer’s promise to accept such delivery by reason of his waiver. If the buyer then refuses to accept such delivery the seller can claim damages and is in essence suing upon the waiver which is unsupported by consideration. So in a way the waiver can be used to create the cause of action. In the case however the plaintiff itself did not meet its duty to fulfil his consideration.
Principally estoppel can be used as a shield, as it secures promises lacking consideration to be enforceable. It does not create a claim in itself. It secures that a promise and the reliance on this promise is secured. It is a defensive weapon. However a defensive weapon can be used in an offensive. This may be possible if the promise was that certain legal defences will not be enforced and the defendant still uses them. Then estoppel can be used to estopp the defendant invoking such defence. Here estoppel becomes a sword. Was not “attack is the best form of defence”?
Is not a promise a modification of the original contract? Or is it a second contract for a certain situation?
The doctrine however has been heavily condemned by the Law Revision Committee (1945) and criticised by Lord Blackburn and Sir George Jessel.