Promissory Estoppel

Question 1

Woodhouse AC Israel Cocoa v Nigerian Produce Marketing (1972).

Answer 1

Woodhouse:

•Various contract for sale at (say) 100 Nigerian pounds
•S confirms that “payment can be made in sterling”
•£(sterling) losses value: 100 Nigerian pounds now = (say) £120 instead of £100
•S demands £120
•B refuses, arguing S represented that the price was now £100, thus S estopped from claiming £120
 Held that whatever B had understood, S had made no such promise: the objective meaning of S’s words was that B could pay the £ equivalent of the original Nigerian currency price at the payment date.

Question 2

Hughes v Metropolitan Railway Co (1877):

Answer 2

• promise can be implied

L gave notice to T to do repair within 6 months
•L and T then entered into negotiations for L to buy back T’s interest
•After negotiations broke down, L claimed lease had been forfeit because T had failed to complete the repairs within 6 months.
 Held (House of Lords): L had impliedly encouraged T to believe that time-period under the repair notice would stop running while the negotiations were continuing. L was not allowed to recover possession of the premises.

Question 3

Guest v Guest

Answer 3

• change of position as reliance

where a son worked for many years on family farm after being promised to inherit it by his parents: this was said to have “incalculable whole-life consequences” for him.

Question 4

MWB v Rock

Answer 4

Reliance likely insufficient where promisor re-asserts rights quickly

C reschedules debt on condition that D pays £3,500 and agrees to new payment schedule.
•D succeeding before CA in arguing the contract had been varied (as discussed in last Lecture).
•D’s alternative argument was that C was estopped.

 Held:- estoppel defence fails, since D suffered no prejudice (payment of the £3,500 did not count, and no other possible prejudice since C was quick to re-assert its rights).

Question 5

D&C Builders Ltd v Rees

Answer 5

• inequitable to resile
• D refused to pay C’s invoice in full, saying £300 was “all you will get”. C reluctantly accepted £300, which was stated (at D’s insistence) to be “in completion of the account”.
• held; C could recover from balance of the invoice
  -> was not estopped from resiling from his statement that he was accepting the 300 satisfaction of the debt as wife had put pressure under him as ransom, hence not inequitable for him to enforce his strict legal rights

Question 6

Combe v Combe

Answer 6

Promissory estoppel cannot be used to generate additional obligations/rights

Combe v Combe [1951] 2 KB 215, the wife was promised £100 during divorce proceedings. She argued, first, that there was a contract: this was rejected because (Lecture 3) there was no consideration. Second, she argued that the promise was enforceable by promissory estoppel.

Held: estoppel cannot be used as a “cause of action”, but only as a defence to a claim to enforce a promise.

Question 7

Jacques v Lloyd D Grange,

Answer 7

• signed terms:

Jacques v Lloyd D Grange, The rule does not apply where a term is misrepresented. In Jacques v Lloyd D Grange, C was told he would only pay commission if a sale completed. It was held the estate agent could not enforce a signed contract stating that commission was payable if a willing buyer was found.

Question 8

Cobbe v Yeomans Row

Answer 8

Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55 is a leading English contract and equity case that explores the enforceability of agreements in principle and proprietary estoppel.

Facts:
- Cobbe, a property developer, informally agreed with Yeoman’s Row Management Ltd to acquire and develop a property.
- The agreement was not finalized in writing, as the parties intended to formalize it after obtaining planning permission.
- Cobbe obtained planning permission, expecting to complete the deal as originally outlined.
- Yeoman’s Row reneged on the agreement, seeking better terms.

Legal Issues:
1. Could Cobbe rely on proprietary estoppel to enforce the informal agreement or claim an interest in the property?
2. Was there an enforceable contract, despite the lack of formalization?

House of Lords Decision:
1. No enforceable contract: The agreement lacked the certainty and intention to create legal relations necessary for contractual enforceability. It was explicitly understood to be incomplete and subject to formalization.

2. No proprietary estoppel: Cobbe could not claim a proprietary interest because:
   
   • Proprietary estoppel typically requires a clear and specific assurance of ownership or rights, which was absent here.
   • Cobbe, a professional property developer, knew the deal was incomplete and taken at his own risk.
3. Unjust enrichment: Cobbe was entitled to compensation for the value of his work in obtaining planning permission but not on proprietary grounds.

Significance:
- Clarified the limits of proprietary estoppel and unjust enrichment in commercial transactions.
- Highlighted the importance of formalizing agreements in writing, especially in property dealings.
- Reinforced the need for clear assurances and reliance for equitable claims like estoppel.