Chapter 12: Promissory Estoppel

Question 1

define estoppel, promissory estoppel

Answer 1

one party is prevented from arguing a legal point

promissory estoppel: can’t argue that there is no consideration

Question 2

Hughes v Metropolitan Railway

Answer 2

Promissory Estoppel application test:

If the parties have entered into a contract w/ distinct consequences and results, and;

They enter into negotiations leading one party to believe that the strict rights under the contract will not be enforced (rights kept in suspense/held in abeyance);

Then the other party will not be allowed to enforce the rights if it is inequitable to do so

Question 3

Central London v High Trees

promissory estoppel applied to a temporary emergency

Answer 3

Elements of Promissory estoppel: when there is a promise as to the future (without consideration) and there is
* Existing relationship: individuals are already parties to a contract (in this case a lease) with rights and obligations.
* Intention that the promise is binding (intended that legal relations are to be altered)
* Intention by the promisor to be acted upon, and is actually acted upon
* Actual reliance by the promisee
* Promisor attempting to act inconsistently
* Inequitable for the promisor to insist on strict legal rights

If all elements met, then Promissor is estopped from not fulfilling its promise; i.e. the promisor cannot act inconsistently with that promise and enforce the legal right they promised away.

Promissory estoppel= SHIELD only! Promisee can protect itself from a promisor going back on the concession that they have promised – used as a defense but not a cause of action

You can end a concession with proper notice/when circumstances change around the concession

clashes w/ Foakes v Beer

Question 4

John Burrows v Subsurface Surveys

Answer 4

Mere Indulgences granted to one party over time do not create a basis for Promissory Estoppel (not enough to give up legal rights)

Proof of intention to change legal relations needed (through negotiation)

Question 5

Waltons Stores v Maher

Answer 5

The rule of promissory estoppel rests on the unconscionability that results from ignoring an assumption held by another party that one has played a role in creating and upon which the other has relied

Promissory estoppel can found a cause of action (as a sword), but only in very rare circumstances (general rule is that it is a shield)

Circumstances: party destroyed their building based on gratuitious promise, then other party backed out (very egregious facts that allow promissory estoppel to be used as cause of action)