CONTRACT LAW - Consideration, ICLR & Capacity - PROMISSORY ESTOPPEL Flashcards
When and who was promissory estoppel formulated by? (2)
Denning J in the case of Central London Property Trust V High Trees House.
Is promissory estoppel part of English Law Contract?(1)
Yes.
What does the case of CLP TRUST V HIGH TREES 1937 demonstrate? (5)
The plaintiff / landlord let a block of flats to the defendant / tenant on a 99 year old lease at a ground rent of £2500 a year.
When the war commenced, the landlord agreed in writing to reduce the ground rent to £1250 and parties did not specify how long he reduced rent would operate for and there was no consideration for the reduction.
By 1945, the flats were fully let and the landlord sought payment for the arrears for the last 2 quarters of 1945 and for full rent for future years.
Denning J held that landlord should succeed in their claim.
The tenant could rely on promissory estoppel to prevent the landlord from going back on their promise to accept reduced rents during the war years when the flats were not fully let but could not prevent the landlord reclaiming the arrears from the point in 1945 when the flats were fully let.
What has considerably limited the impact of promissory estoppel? (5)
Acute judicial keenness to constrain promissory estoppel within very strict parameters. These are:
1. It acts as a shield and not a sword
2. A clear and unequivocal promise that strict legal rights will not be fully enforced.
3. A change of position in reliance on the promise
4. Inequitable to allow the promiser to go back on their promise
What does it mean by promissory estoppel acts as a shield not a sword? (2)
Promissory estoppel can only act as a defence to an action and cannot be used as a cause of action, it does not give a party the right to sue upon a promise.
What does the case of COMBE V COMBE demonstrate? (4)
Following a divorce Mrs. Combe’s husband indicated that he was prepared to make an allowance of £100 a year to Mrs Combe but did not make any of the agreed payments.
The brought action claiming arrears of payment under the husband’s promise and attempted to use promissory estoppel as a cause of action as he had made a promise which she had relied upon.
Court of appeal held that the wife had given no consideration for the husband’s promise and the promise was not binding.
She could not use promissory estoppel to enforce her husband’s promise to pay as it is only possible to use it to stop the promiser going back on their promise that would not enforce their strict legal rights - shield not sword.
What is meant by clear and unequivocal promise that strict legal rights will not be enforced? (2)
The promise must be intended to affect legal relations and not simply amount to a gratuitous privilege given to the promisee, promise can be expressed or implied.
What happens if there is a change of position on reliance on the promise? (2)
It must have influenced the conduct of the party to whom it was made. An act which takes place before the promise cannot be in reliance on the promise.
What does the case of D&C BUILDER V REES 1966 demonstrate? (4)
Inequitable to allow the promiser to go back on their promise.
Plaintiff builders had completed a project for the defendants and the defendants knowing that the builders were under financial difficulties offered a cheque of £300 in full and final settlement of the debt of £482.
Builders accepted but then later sued for the balance and sought to rely on the defence of promissory estoppel.
Lord Denning MR said that because his promise to accept less has been extracted from the plaintiffs by intimidation they could not rely on promissory estoppel since those who seek equity must do equity.
High trees and periodic payments? (1)
The right to periodic payments may resume once the period is over which the promissory estoppel operates.
Tool metal & tungsten and full legal rights? (1)
The promiser may resume their full legal rights after giving reasonable notice of their intention to do so.
