With reference to three decided cases, explain the requirement of Promissory Estoppel

In Dunlop v Selfridge (1915) the House of Lords explained consideration in terms of purchase

and sale – the claimant must show that he or she has bought the defendant’s promise, by doing,

giving or promising something in return for it. Atiyah has suggested that consideration can

simply be seen as ‘a reason for the enforcement of promises’, with that reason being ‘the justice

of the case’. In other words the mere fact of an agreement alone does not make a contract both

parties to the contract must provide consideration if they wish to sue on the contract. However

there are always exceptions when it comes to the law. Consider the doctrine of Promissory

Estoppel , this doctrine provides a way in which promises are made binding in certain

circumstances where there is no consideration. This principle derived from equity the promisor

makes a promise, which another person acts on, the promisor is stopped (estopped) from going

back on the promise although no consideration as “it is inequitable to do so” thus sometimes

known as equitable estoppel. Although The precise extent of the doctrine of promissory estoppel

is unclear. What is clear is that the following conditions must be fulfilled before the doctrine can

be applied. Such requirements are contractual/legal relationship, promise, reliance, inequitable to

revert, a shield or a sword and distinctive or suspensive of rights. There must be an obvious and

unambiguous promise not to enforce a person’s full legal rights. there must already be a

contractual relationship between the parties before

Promissory estoppel can be raised.This promise may be implied from conduct, but silence, or

failure to act, will not usually be sufficient. In China-Pacific SA v Food Corp of India (1980), the

parties had been involved in a complex commercial dispute, entailing a great deal of

correspondence and discussion. The defendants claimed that the contents of one of the letters,

and remarks made during a discussion between the two parties’ barristers, provided grounds for
promissory estoppel. On the facts of the case, the claim was rejected, as no unambiguous

promise had been made

it is not entirely clear whether or not an act of reliance has to be something which would put

the promisee at a disadvantage if the promisor decided to reclaim their legal rights, or whether

it can simply be some act which otherwise would not have happened. In Hughes, the tenants’

failure to make repairs because they were relying on the landlord not to enforce the forfeiture

clearly put them at a disadvantage, and in Tool Metal Manufacturing, Lord Tucker suggested that

the act of reliance should involve such a disadvantage.

Promissory estoppel can usually only be used to prevent rights being exercised for a period of

time; it cannot destroy them for ever. This was stressed in Tool Metal Manufacturing Co Ltd v

Tungsten Electric Co Ltd (1955). A licence for the use of a patent provided that the licensees

had to pay ‘compensation’ if they manufactured more than the agreed number of items using

the patent. In 1942, owing to the war, the patent owners agreed to forego their right to ‘com-

pensation’ in the national interest, with a view to a new agreement being made after the war.

When the war was over, the patent owners had problems getting the licensees to make a new

agreement, and eventually claimed the compensation that would have been due from the time

the war ended.The court held that the patent owners’ promise was binding during the specified

period, so they could not get back any money that would have been due if the agreement had not

been made; but they could revive their legal entitlement to receive the compensation payments
after that period, on giving reasonable notice to the other party. In other words rights can be

revived for the future but not claimed back for the past.

Inequitable to revert, As an equitable doctrine, promissory estoppel will only be applied where it

would be inequitable for the promisor to go back on what was promised, and insist on their strict

legal rights. If the party claiming promissory estoppel has acted in such a way that it would be

inequitable to allow them to take advantage of it, the doctrine will not be applied. This was the

situation in D & C Builders v Rees (1966). Mr and Mrs Rees could not rely on promissory

estoppel because of their own behaviour they had deliberately taken advantage of the builders’

financial problems, effectively holding them to ransom and there was also evidence that they had

misled the builders about their own financial position, suggesting that they could not afford the

whole price when in fact they were well able to pay. Given such behaviour it would be

inequitable to allow them to rely on promissory estoppel. Lord Denning stated obiter that if the

party claiming promissory estoppel has acted in such a way that it would be inequitable to allow

him or her to take advantage of the doctrine, then the doctrine will not be applied.

Promissory estoppel cannot be used to create entirely new rights or extend the scope of existing

ones, only to prevent the enforcement of rights already held it has been described as being ‘a

shield and not a sword’. This can be seen in Combe v Combe (1951) a husband and his wife

were involved in divorce proceedings, during which he promised to pay her an annual allowance.

She later brought an action to enforce this promise and argued, among other things, that she had

given consideration for it by not exercising her right to apply to the court for a maintenance

order. it was held that this could not be consideration because her husband had not asked her not

to apply to the court, and therefore his promise had not been made in return for her promising not

to do so. Since there was no contract between them, Mrs Combe did not have a legal right to the
payments her husband promised, even though she had relied on his promise in not applying for a

maintenance order.

Karen leashed a block of flat from ABC limited at a ground rent of 4500. It was a new

block of flats at the time the lease was taken out in 1995. In 2007 many of the flats from

ABC limited agreed to reduce the rent to 2,500 the agreement was put in writing and

Karen paid the reduce rent from 2007.When the economic crisis ended in 2012, the flats

became fully occupied and the ABC limited slighted to return to the original agreed rent of

4500 Advise Karen whether she is liable to pay 4500 or 2500.

The case presented is very similar to that of Central London Property Trust Ltd v High Trees

House Ltd (1947). The claimant owned a block of flats. In September 1939, it had leased the
block to the defendant, who planned to rent out the individual flats, e Second World War had just

broken out, and many people left London, making it difficult to find tenants. As a result, many of

the flats were left empty. The claimant therefore agreed that the defendant could pay just half the

ground rent stipulated in the lease. By 1945, the flats were full again, and the claimant sought the

full ground rent for the last two quarters of 1945. The claimant stated that the agreement was

only ever intended to last until the war was over, or the flats fully let, whichever was the sooner.

Both events had happened by the time payment for the last two quarters of 1945 were due, and

so the company believed it was entitled to full payment for that period. Denning J declared that

the landlord’s claim for its full contractual rights for the period 1940–45 had been destroyed by

accepting the reduced rent for the wartime period, it lost its right to claim for arrears of rent,

rather than simply suspending this right until the tenant could afford to pay. Under the doctrine

of promissory estoppel, a contracting party who promises not to enforce a contractual right will

not be able to enforce that right later if it would be inequitable to do so, and the promise has been

relied upon by the other party.

Evidently in the case of Karen v ABC limited the facts seems to be in accordance with one

another as there was an agreement between both parties to reduce the rent to 2,500 as many of

the flats were still unoccupied due to the economic crisis at this point ABC limited had promise

not to enforce the 4,500 due to the financial crisis thus ABC limited contractual rights had been

destroyed during the years 2007 to 2012 by accepting the reduce rent during the financial crisis

thus cannot claim for remaining rent during that time period as Karen acted in reliance on the

promise, in the sense that it influenced Her conduct. For example, Karen continued to rent out

the flats, rather than, for example, trying to sell her leasehold interest to someone else. However

this agreement would be only binding through the years where financial crisis was present as
their promise was solely based on those condition the ABC limited only suspended their

contractual rights during the years 2007 -2012 as the financial crisis was ended and Karen no

longer relied on the promise

In conclusion Karen is liable to pay ABC Limited the original agreed rent of 4,500 as the

circumstances that made her relied on the reduce rent of 25,000 no longer exist

With reference to atleast one decided case explain consideration

In order for any agreement to be deemed legally binding, it must include consideration on the

part of every person or company that enters the contract.It distinguishes a bargain or contract

from a gift. Lush J in the case of Currie v Misa (1875) referred consideration consist of a benefit

to the promisor or a detriment to the promisee as “some right, interest, profit or benefit accruing

to one party, or some forbearance, detriment and loss or responsibility given, suffered or

undertaken by the other". In the case of Currie v MisaA company named Lizardi and Co,then in

good credit in the City, sold four bills of exchange to Mr Misa drawn from a bank in Cadiz. Mr

Currie was the owner of the banking firm and the plaintiff bringing the action. The bills of

exchange were sold on the 11th of February and by the custom of bill, brokers were to be paid

for on the first foreign post-day following the day of the sale. That first day was the 14th of

February. Lizardi & Co. was much in debt to his banking firm, and being pressed to reduce his

balance, gave to the banker a draft or order on Mr Misa for the amount of the four bills. This

draft or order was dated on the 14th, though it was, in fact, written on the 13th, and then

delivered to the banker. On the morning of the 14th the manager of Misa's business gave a

cheque for the amount of the order, which was then given up to him. Lizardi failed, and on the

afternoon of the 14th the manager, learning that fact, stopped payment of the cheque. Lush J,

Archibald J, Quain J held that the banker was entitled to recover its amount from Mr Misa. Lord
Coleridge CJ dissented. Through this case the true profound meaning of consideration was

outlined.

Jack asks Hugo, his brother, to keep a special eye on his home while he is always on a

business trip. Jack tells Hugo

“I will settle you when I return, but do not go overboard. Do not spend more than $1500

monthly on the yard

Upon Jack's return, he pays Hugo $1500 and promises him a further $500. When Hugo

asks for the 500 Jack refuses to pay him.

With reference to atleast one decided case, advise Hugo whether he is entitled to the money

from Jack.

The case sited above seems to have fallen under the principle where consideration must not be

past when consideration is described as being past it said that there is no

consideration.Consideration must be given in return for the promise or act of the other party

something done, given or promised for another reason will not count as consideration. As we

know exceptions always arises in the face of the law it is said where the promisor has previously

asked the other party to provide goods or services then a promise made after they are provided

will be treated as binding.

In the case provided we observed that Jack and Hugo had a contractual agreement where Hugo

was asked to provide consideration that consideration being “keeping an eye on Jack’s home and

Jack's consideration being the payment for his services on his return. On his return Hugo had

provided consideration and Jack paid him his 1500 and promises to give him a further 500 is at

this point the exception under past consideration arises where a services was provided and under
it's provision a promise was made thus the promise of the further 500 is treated as binding to

further understand the principle outlined in the aforementioned statement consider the case

Lampleigh v Braithwait The defendant, Braithwaite, killed a man. He asked the plaintiff,

Lampleigh to secure him a pardon from the king. The plaintiff spent many days doing this, riding

and journeying at his own cost across the country to where the King was and back again.

Afterwards, the defendant promised to pay the plaintiff 100 in gratitude. He later failed to pay

the money. The plaintiff sued. It might appear that Lampleigh’s consideration was past, since he

had secured the pardon before the promise to pay was made. In fact, the court upheld

Lampleigh’s claim. It reasoned that Lampleigh had obtained the pardon at Brathwait’s own

request and this request carried with it the unspoken understanding that the service would be paid

for. Lampleigh obtained the pardon after, and in return for, this implied promise to pay, and so

obtaining the pardon was good consideration for the promise to pay. The later promise,

specifying that 100 would be paid, was said to be merely confirmation of the original, unspoken

one.

Past consideration is sufficient when it is provided at the promisor’s request and it is understood

that payment will be made in return. Therefore Hugo is entitled to the money from Jack as a

promise was made on the carrying out of his service Jack.