Part payment of a debt and promissory estoppel

Question 1

If X promises to accept part payment of a debt without further consideration; is Y discharged from paying the full amount due?

Answer 1

No

Question 2

If X promises to accept part payment of a debt without further consideration how can Y be discharged from paying the full amount due?

Answer 2

Y must provide fresh consideration.

This must be a new element - e.g. paying at a different time, place, in combination with a material good (even if value is less than original good)

Question 3

What is an exception to the rule that part payment of a debt is not good consideration?

Answer 3

Promissory estoppel

Question 4

What is Promissory estoppel in a nutshell?

Answer 4

• equitable doctrine
• court discretion
• party seeking to rely on it must be acting in good faith/ acting honourably.
• prevents a party from going back on their promise
• designed to prevent unconscionable conduct

Question 5

What are 6 requirements for promissory estoppel to be established?

Answer 5

1. D made a clear and unambiguous promise.
2. C acted in reliance on the defendant’s promise.
3. C’s reliance was reasonable and foreseeable.
4. C suffered an injury due to reliance on the defendant’s promise.

unequitable for D to go back on their promise.

Question 6

What are 2 ways in which promissory estoppel may come to an end?

Answer 6

1. change isn circumstances causing the promises to come to an end.

e.g. High Trees -> reduced rates during WW2 -> WW2 ends thus increased occupancy and increased prices -> PE can come to end a reasonable time after the war has ended -> High Trees could demand full payment after the war had ended but not during.

2. reasonable notice that promise is ending