Promissory Estoppel

Question 1

Central London Property Trust v High Trees House

Answer 1

(1947)
Facts: plaintiffs owners of a block of flats in London which is rented for £2,500 p/a, struggled to find sufficient tenants during WW2. As a result, plaintiffs agreed that the rent would be reduced to half. This continued until after the war when the difficulty in finding tenants ended. Plaintiffs sought to return to the original terms of the agreement and want to claim the other of the rent for the war years.
Held: Denning J confirmed that the plaintiffs could recover the full rent from the end of the war.

Question 2

Five suggested limitations to the doctrine of promissory estoppel:

Answer 2

1) Must be an existing legal relationship;
2) Must have been (detrimental) reliance;
3) Doctrine can only be used as a ‘shield, not a sword’;
4) Must be inequitable for the promisor to go back on the promise;
5) Doctrine is only suspensory in effect.

Question 3

Existing legal relationship, case:

Answer 3

Combe v Combe (1951)
Facts: husband and wife were getting divorced. Husband agreed to pay his wife £100 p/a net of tax. Husband never paid any money and after seven years wife sued on the basis of this promise.
Held at first instance that she could claim using promissory estoppel.
Held: Lord Denning commented that consideration remained “a cardinal necessity of the formation of a contract, but not of its modification or discharge.”

Question 4

There must have been detrimental reliance, case:

Answer 4

WJ Alan & Co v El Nasr
Facts: dispute concerned a letter of credit, which had been opened in sterling rather than in Kenyan Shillings as specified in the contract. The other party had however drawn on this credit in relation to various transaction. The judge rejected the argument that this amounted to a binding waiver of the originals terms as to currency, because there was no evidence that the party for whose benefit the waiver would operate had acted ‘to their detriment’.

Question 5

Doctrine can only be used as a ‘shield, not a sword’, case:

Answer 5

Again derives from Combe v Combe. The attempt by the wife to use promissory estoppel can only ever be used by a defendant, and never by a claimant.