Promissory Estoppel

Question 1

Part-Payment of debt: Pinnel’s Case [1602]

Answer 1

“Payment of a lesser sum on the day in satisfaction of a greater cannot be any satisfaction for the whole… by no possibility a lesser sum can be a satisfaction to the plaintiff”

Question 2

Part-Payments of debt:

Answer 2

(a) A pre-existing legal relationship between the parties, this does not have to be a contractual relationship (Coombe v Coombe). However, in many cases the relationship will be contractual.
(b) A clear and unambiguous (clear) statement by the promisor that his or her strict legal rights will not be enforced. The nature and extent of the promise is important if the courts are to give effect to the intention of the parties.
(c) There must be some action in reliance on the promise. (Alan v El Nasr [1972]) (The post chaser [1982] No need to establish detrimental reliance.) For Denning this was the key to enforceability of promises – the issue of reliance.
(d) The promisee must have acted equitably. (D & C builders v Rees [1966].)
(e) ‘A shield not a sword’. (Combe v Combe [1951]) the doctrine operates as a defence and cannot be used as a cause of action.
- Suspensory – Tool Metal Manufacturing v Tungsten Electrical [1955].

Question 3

Foakes v Beer [1884]

Answer 3

Part-Payments = insufficient consideration.

Question 4

Re Selectmove [1990]

Answer 4

The court considered itself bound by the House of Lords decision in Foakes v Beer.

Question 5

Criticisms of the common law approach:

Answer 5

1) Commercially unrealistic;

2) Harsh, where part-payment has been accepted “in full settlement” and the debtor has relied on that;

3) When coupled with the rule that “consideration need not be adequate”, potentially absurd.

Question 6

Promissory Estoppel: Lord Denning

Answer 6

“A promise intended to be binding, intended to be acted on and in fact acted on, is binding so far as its terms properly apply.”

The promisor will be stopped by their own promise.

Question 7

Part-Payment in equity

Answer 7

Equity: Developed as a response to the rigidity of common law.
Those unable to obtain an adequate remedy at common law would seek a remedy from the courts of equity.

Question 8

Central London Property Trust v High Trees House [1947]

Answer 8

Initial price of rent was £2500, during the war, when there was financial difficulties so the rent was lowered to £1250. After the war the rent was increased once again. Could the claimant again claim full rent? Could they recover money loss from the war time?

Held that they could demand the full rent going forward. However no back payments could be demanded. Due to promissory estoppel, the promise of the claimant at the time of the war, stops them from claiming the money.

Question 9

Hughes v Metropolitan Railway Co [1877]

Answer 9

The effect of the notice had been suspended during the negotiations for the sale of the property.
“Equitable Waiver”

Question 10

Jorden v Money [1854]

Answer 10

Jorden, the promisor did not intend to be legally bound.
The claim failed.