Promissory Estoppel Flashcards
What is Equity?
Equity refers to a set of legal principles and rules that originated from the English Court of Chancery.
It operates alongside common law principles to provide additional remedies and fairness in situations where strict application of the law may lead to unjust outcomes.
What are some Equitable Maxims?
“Equality is equity”
“Equity looks to the substance not the form”
“He who comes to equity must come with clean hands”
What is Promissory Estoppel?
Promissory estoppel is an equitable doctrine that prevents one party from going back on a promise if it would be unjust or inequitable to do so.
It applies when a party has led another to believe in a particular state of affairs, and it would be unfair to enforce strict legal rights based on the interactions between the parties.
What are the limitations of Promissory Estoppel?
Existing Legal Relationship: There must already be a contractual or legal relationship between the parties before promissory estoppel can be invoked.
Shield not a Sword: Promissory estoppel can only be used as a defense or shield to prevent enforcement of strict legal rights, not as a means to initiate legal action.
Reliance: The party seeking to invoke promissory estoppel must have reasonably relied on the promise and taken some action or suffered some detriment as a result.
Inequitable to go back on promise: It must be unfair or unjust for the promisor to renege on the promise.
Suspension of rights: Promissory estoppel temporarily suspends the rights of the promising party, allowing the relying party to enforce the promise during that period.
How does Promissory Estoppel relate to consideration?
Consideration is generally required to form a contract.
Promissory estoppel is an exception to the consideration requirement, allowing a promise to be binding even without consideration.
What is the effect of Promissory Estoppel on the rule in Foakes v. Beer?
Promissory estoppel mitigates the harshness of the rule in Foakes v. Beer, which stated that part payment of a debt is not good consideration.
Foakes v. Beer would still be decided the same way, but promissory estoppel can aid the party seeking to enforce the promise if it would be inequitable to allow the creditor to go back on the promise.
What are the requirements of consideration?
Must not be past consideration.
Must be sufficient.
Performance of existing duties may constitute good consideration in certain circumstances, such as public duty, duty to a third party, or existing contractual duty.
Practical benefit can also be considered as good consideration in promises to pay more.
What are the exceptions to the rule of part payment of a debt in Pinnel’s Case?
If the debtor offers something different, such as goods or services.
If the payment is made at a different place.
If the payment is made earlier than the due date.
All these exceptions provide fresh consideration and add value for the creditor.
