Co2: Consideration & Promissory Estoppel (rev notes)

Question 1

Consideration - definition

Answer 1

= Currie v Misa (1875) : either benefit or profit to one party, or detriment to / resp undertaken by the other

valuable consideration = “some right, interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other”

Question 2

2 reasons to have consideration

Answer 2

Evidential value = so that a contract doesn’t form too easily / off random promises, ensures that both parties are serious about the agreement (like a formality)

Principle of reciprocity (symbolically, bcs consideration need not be adequate)
= makes sure that only ± bilateral bargains are enforced (where both parties get smth out of it)

Question 3

Consideration of trivial value

Answer 3

is still valid consideration = Chappell v Nestle (1960) (HL)

Question 4

Promise not to complain

Answer 4

is not valid consideration bcs complaining not a right / smth one is entitled to do, so not relinquishing a benefit = White v Bluett (1853)

Question 5

Withdrawing threat to be a nuisance & promising to proceed rapidly

Answer 5

= sufficient consideration bcs both benefit the other party = Pitt v PHH Asset Management Ltd (1994)

Question 6

Forbearing one’s legal rights (eg quitting smoking)

Answer 6

= valid consideration = Hamer v Sidway (1891)

Question 7

Promise to perform an existing legal duty

Answer 7

= valid consideration as long as performance will benefit the promisee = Ward v Byham (1956) (CA), confirmed in Williams v Williams (1957)

Question 8

Public authority doing something beyond what it is obliged to do by statute

Answer 8

= valid consideration = Glasbrook Ltd v Glamorgan CC (1925) (HL)

Question 9

Police owes the general public a general duty to prevent violence & disorder, but lawful to charge for extra protection

Answer 9

following Glasbrook

= Michael v Chief Constable of South Wales police (2015) (SC) per Lord Toulson at [30]-[31]

Question 10

Promise to pay more for performance of existing contractual duties (more for same)

Answer 10

is not enforceable (due to lack of consideration) = Stilk v Myrick (1809) (HL)

UNLESS it confers a ‘practical benefit’ on the promisor = Williams v Roffrey Brothers (1990) (CA)

Question 11

A promise to do something that one is already bound (to a 3P) to do

Answer 11

is valid, there is sufficient consideration (as long as benefits promisee) = Shadwell v Shadwell (1860) (CA)

Question 12

Act done prior to a promise can be valid consideration IF

Answer 12

• the act has been done at the promisor’s request
• the parties understood it was to be rewarded by the promisor (money or other benefit)
• the payment would have been enforceable had it been promised in advance

= Lord Scarman in Pau On v Lau Yiu Long

Question 13

Promise to accept less than one is entitled to under pre-existing contract (same for less)

Answer 13

= not binding for want of consideration = Foakes v Beer (1884) (HL)

=> Upheld in Re Selectmove : CA refused to extend Williams v Roffey Brothers to part payment of debt cases

Question 14

Past consideration

Answer 14

is generally not valid consideration = Roscola v Thomas (1843), upheld by CA in Re McArdle (1951) (CA)

Question 15

Past performance

Answer 15

is generally not valid consideration =  Eastwood v Keynton (1840) (CA)

Question 16

courts can be flexible abt past consideration

Answer 16

may not always take “a strictly chronological view of the sequence of events”, fine if the relevant events are ‘part of the same overall transaction’ (K) = Classic Maritime Inc v Lion Diversified Holdings [2009] (HC)

Question 17

Past consideration - exception

Answer 17

= An act requested by the promisor with the understanding that it will be rewarded is valid consideration even if it were performed prior to the promise for reward being given = Lampleigh v Braithwait (1615), more recently brought back in Pau On v Lau Yiu Long (1980) (HL)

Question 18

More for same (2)

Answer 18

Stilk v Myick = paying more for same performance : not valid consideration

Williams v Roffrey Brothers: paying more for same performance BUT promisor derived a practical benefit = avoiding penalty for late completion, ensuring continued performance (applies also to S v M), not having to find someone else (applies also to S v M)

Question 19

Same for less (3)

Answer 19

Foakes v Beer: debt case – promise to accept less than entitled to under the contract not binding for want of consideration

In re Selectmove : also debt case – promise to accept payment in instalments (so delayed) rather than lump sum by due date not binding for want of consideration
=> CA unwilling to extend Williams v Roffrey Brothers ‘practical benefit’ analysis to debt cases

/!\ also MWB case : rescheduling debt (rent), also less for same, but court found consideration => puzzling – but mb can be reconciled bcs practical benefit of not having to find another tenant (≠ Selectmove = tax case)

Question 20

Chen Wishart’s unilateral contract analysis

Answer 20

stick a unilateral contract (new payment / reduced performance / whatever the change) on top of existing bilateral contract => the unilateral contract becomes binding upon performance

=> in MWB, tenants have in fact paid some money back = performed (in part)  offer cannot be withdrawn once performance has begun

=> ≠in Foakes : debtor hadn’t done anything to accept new offer = the unilateral contract was not yet binding

Question 21

3 requirements to rely on promissory estoppel

Answer 21

(i) Clear promise / repº by A to B not to enforce strict legal rights against B
(ii) B has relied on that promise / it has influenced B’s conduct
(iii) It would be inequitable for A to be allowed to go back on the promise

Question 22

Requirements compensate for lack of consideration

Answer 22

(i) clarity makes up for evidentiary function of consideration,
(ii) reliance shows that promise is taken seriously / intended to be binding, and
(iii) inequity sets aside promises which should be enforced from those which shouldn’t (infringing on ppl’s autonomy only to prevent them from doing smth bad)

Question 23

2 possible effects of promissory estoppel

Answer 23

suspensive = A can no longer go back on promise unless gives reasonable notice
- accepted effect of promissory estoppel (see Halson / eg Hughes v. Metropolitan Railway)
- moderates effect of the doctrine : not fully protecting unilateral promises

extinctive = A can no longer enforce right he promised not to
- /!\ not generally accepted, case establishing possibility of it = Collier v Wright (Holdings) Ltd only abt triability of promissory estoppel point so not a solid authority

Question 24

Pe is not a cause of action on its own

Answer 24

= Combe v Combe [1951] (CA) , confirmed in Baird Textile Holdings v Marks and Spencer plc [2001] (CA)

BUT can be used to assist a cause of action : Baird Textile Holdings

= Functioning of equity: not helping ppl do things, but refusing to give the support / powers of the court to a wrongdoer

Question 25

Principle of promissory estoppel - Denning J in High Trees

Answer 25

“Where parties enter into an arrangement which is intended to create legal relations between them and in pursuance of such arrangement one party makes a promise to the other which he knows will be acted on and which is in fact acted on by the promisee, the court will treat the promise as binding on the promisor to the extent that it will not allow him to act inconsistently with it even although the promise may not be supported by consideration in the strict sense and the effect of the arrangement made is to vary the terms of a contract under seal by one of less value”

Question 26

Halson : 5 features of promissory estoppel

Answer 26

(1) A “clear and unequivocal promise or representation, either express or implied” = Hughes v. Metropolitan Railway [1877], which is intended to affect legal relations between the parties and indicates the promisor will not insist on his strict legal rights

(2) Which has “influenced the conduct of the party to whom it was made” = The Post Chaser [1981]

(3) It is “inequitable for the promisor to go back on the promise” = D&C Builders v Rees [1965]

(4) Effect = (generally) “to suspend but not to extinguish rights” = Hughes v Metropolitan Railway, especially per Lord O’Hagan

(5) “Prevents the enforcement of existing rights but does not create new rights”

Question 27

Doctrine of PE laid down in

Answer 27

Hughes v Metropolitan Railway Co (1877) (HL), per Lord Cairn LC

Question 28

Suspensive & extinctive effect (authorities)

Answer 28

• Suspensive: Hughes v Metropolitan Railways Co (1877) (HL)
• Extinctive : Collier v Wright (Holdings) ltd (2007) (CA)

Question 28

Doctrine of PE revived by

Answer 28

Denning J in Central London Property Ltd v High Trees House Ltd [1947] (HC)

Question 29

Promissory estoppel cannot be used offensively (3)

Answer 29

In English law, promissory estoppel alone is not a cause of action, cannot be used ‘offensively’ = Combe v Combe [1951], also discussed by Halson in ‘The offensive limits of promissory estoppel’ [1999]

≠Proprietary estoppel : can be a cause of action = Crabb v Arun DC (1976)

However, proprietary estoppel is a cause of action in other jurisdictions eg Australia = Walton Stores Ltd v Maher (1988) (HCA) - English courts declined to follow in Baird Textile Holdings v Marks & Spencer plc

Question 30

Promissory estoppel can assist a cause of action

Answer 30

= Baird Textile Holdings v Marks and Spencer plc [2001] (CA)

Question 31

Promissory estoppel cannot be founded on a promise which has been induced by the promisee’s inequitable conduct (eg. economic duress)

Answer 31

= D&C Builders v Rees [1965]