Consideration and promissory estoppel

Question 1

Consideration

Answer 1

it is necessary for the formation of a contract. It is “some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other.” (Currie v Misa (1875)). A promise must be made for another promise.

There must be a benefit and a detriment to both parties, but when there is no detriment then the benefit for the other party is enough (Edmonds v Lawson [2000]).

Question 2

Moral obligatios

Answer 2

Previous moral obligations not sufficient for consideration (Eastwood v Kenyon (1840)). An executed consideration is a promise for an act – the performance must be carried out to bind the other party (Carlill).

Question 3

Past consideration

Answer 3

Past consideration is bad – only valid if it comes from previous request of the promisor (Lampleigh v Brathwait (1615)) but in Re Casey’s Patient [1892] it must be something that would presumably be paid for eventually. Pau On v Lau Yiu Long [1980] established that it must be done at promsior’s request, the act must be understood to be remunerated and it must be legally enforceable.

Question 4

Adequacy of consideration

Answer 4

Consideration need not be adequate (Chappell v Nestle [1960]), but it must be real. Consideration cannot be doing something you already intend to do or forbear from something you would not do (Arrale v Costain Civil Engineering [1976]). It must be possible (Clifford v Watts (1870)) and not too vague (Stabilad v Stephens No 2 [1999]).

Question 5

Existing public duties or third parties

Answer 5

Existing public duties (subpoena in Collins v Godefroy (1831)) and existing duties to third parties (Shadwell v Shadwell (1860)) generally are not consideration, although existing duties to third parties can be even if there is no extra detriment (Pao On v Lau Yiu Long [1980]).

Question 6

Existing duties to promisor

Answer 6

Existing duties owed to promisor normally is not consideration (Stilk v Myrick (1809) but if doing the work provides a practical benefit then it can be considered consideration (Roffey Bros [1991]).

Question 7

Discharging a debt

Answer 7

In discharging debt, typically a smaller sum cannot discharge a larger sum (Pinnel’s Case) unless it is a gift (horse, robe). This was reinforced in Foakes v Beer (1884).

Question 8

Promissory estoppel

Answer 8

Established in Central London Property Trust v High Trees [1947] and prevents promisors from inequitably resiling from promises which the promisee has acted on to their detriment.

Question 9

Requirements of promissory estoppel

Answer 9

The requirements of this to be used as a shield are that it must be a clear promise (Woodhouse v Nigerian Produce [1972]), it must be inequitable to go back on it (D&C Builders v Rees [1966]), the promisee must have changed position in reliance on the promise (Tungsten v Tool Metal [1950]) though it does not need to be detrimental (Alan v El Nasr [1972]).

Question 10

Suspensory or temporary?

Answer 10

Promissory estoppels seeks to suspend contractual obligations not extinguish (Tungsten v Tool Metal [1955]). Though it can become final if the promisee cannot resume his position (Ajayi v Briscoe [1964]) or unequivocally said so (Brikon v Carr [1979]).

Question 11

Shield or a sword?

Answer 11

Promissory estoppels is a shield and not a sword (Combe v Combe [1951]) and cannot create a cause of action.