Modification

Question 1

A pre-existing contractual duty does not provide good consideration so modification cannot be enforced

Answer 1

Stilk v Myrick

Question 2

Exceptions to pre-existing duty rule:
Discharge of old contract

Rescission and a new contract

A finding of new consideration

Answer 2

Hartley v Ponsonby

Schwartzreich v Bauman-Basch

The Atlantic Baron

Question 3

Became easier to enforce contractual modification on basis of new consideration after this case. If the modification confers a practical benefit then it can be good consideration

Answer 3

Williams v Roffey

Question 4

Goes against the principle of part payment of a debt in Pinnels and Foakes v Beer. Promise of less (decreasing modification) did confer a practical benefit so was sufficient to be good consideration

Answer 4

MWB Business Exchange v Rock Advertising

Question 5

When the decreasing modification is not supported by consideration → doctrine of promissory estoppel

Answer 5

Central London Property Trust Ltd. v. High Trees House Ltd (High Trees - Lord Denning)

Question 6

Requirements of promissory estoppel:

1. The promisor makes a clear and unequivocal promise not to insist on strict legal rights → decreasing modification.

Answer 6

Hughes v Metropolitan Railway Co

Question 7

Requirements of promissory estoppel:

2. Reliance such that it is unfair to allow the promisor to go back on his word

Answer 7

The Postchaser

Question 8

Requirements of promissory estoppel:

3. Promisee must have acted equitably

Answer 8

D&C Builders v Rees

Question 9

Promissory estoppel is extinctive as to past but suspensory as to future obligations

Answer 9

Tool Metal Manufacturing Co. Ltd. v. Tungsten Electric Co. Ltd.

Question 10

Promissory Estoppel is a shield not a sword

Answer 10

Combe v Combe

Question 11

There are two elements to a claim of economic duress:

1. Application of illegitimate pressure
2. Resulting compulsion of the victim
   - Lord Hoffman

Answer 11

R v A-G for England and Wales

Question 12

‘illegitimate pressure must be distinguished from the rough and tumble of… normal commercial bargaining’ - per Dyson J

Answer 12

DSDN Subsea Ltd v Petroleum Geo Services ASA

Question 13

Threat to refuse future business usually not illegitimate pressure
Could be illegitimate if it was in bad faith or with the imbalance of economic power.

Answer 13

CTN Cash and Carry v Gallaher

Question 14

Threat to breach an existing contract is illegitimate pressure so agreement not enforceable (3)

Answer 14

The Atlantic Baron (did not go to court immediately so held that contract had been affirmed despite illegitimate pressure)

Atlas Express v Kafco

Question 15

Threat to not enter into a contract is not illegitimate (previous negotiations had not led to a contract)

Answer 15

XS Racing and Event Marketing

Question 16

Pressure amounting to compulsion

Answer 16

Pao On checklist
Absence of consent
Presence or absence of protest (Atlas Express)
Adequacy of alternatives
Affirmation (Atlantic Baron)
Independent advice