Promissory Estoppel Flashcards
Why does English law require consideration?
The reason for this is that English law recognises bargains and not gratuitous promises
what is the doctrine of doctrine of promissory estoppel?
an equitable exception to the rule that a promise must be supported by consideration.
What case shows Part payment of a debt is not good consideration?
Pinnel Case (1602)
Foakes v Beer (1884)
What is the significance of the Pinnel Case (1602)
At common law, the debtor remains liable even where the creditor has agreed to release him from further liability, as the promise of part payment is not supported by any consideration moving from the debtor.
What happened in Foakes v Beer (1884) ? Facts and law…
Dr Foakes owed Ms Beer money following Court judgement. Mrs Beer agreed if he paid £500 and the rest in instalments would not ‘take any proceedings whatever on the judgment’. All judgment debts carry interest until paid, but this wasn’t mentioned in their agreement.Dr Foakes paid and Mrs Beer then claimed the accrued interest. Dr Foakes refused to pay on the basis of the written agreement whilst Mrs Beer claimed that the agreement was unsupported by consideration.
HELD by the House of Lords: judgment was given in favour of Mrs Beer. This was a naked attempt to usurp the rule in Pinnel’s Case
How does Foakes v Beer and Wiliam v Rothey differ?
been argued that the two cases can be distinguished on the grounds that Foakes v Beer concerned a promise to accept a lesser sum whilst Williams v Roffey involved a promise to pay more to secure performance of an existing contractual obligation
why is there a rule for consideration for part payment?and renegotiating after contract settled?
rules originated from a common desire to prevent extortion and that both situations are now protected by the doctrine of economic duress.
What is the significance of Re Selectmove Ltd [1995]
(involving paying back money to inland revenue)
confirmed that the Williams v Roffey principle does not apply to the variation of a strict contractual right whereby one party agrees to accept a lesser sum.
What case confirmed that the Williams v Roffey principle does not apply to the variation of a strict contractual right whereby one party agrees to accept a lesser sum.
Re Selectmove Ltd [1995]
What is the significance of MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2016 with reference to the facts?
a landlord agreed o reschedule rental payments under a licence agreement to give a tenant longer to pay. The court acknowledged that part payment is not normally good consideration. However, the landlord obtained a practical benefit by keeping the tenant in the property (compared to leaving the property vacant). This was sufficient consideration.
What was Lord Sumption view on Foakes v Beer?
the case was ‘ripe for re-examination’
When can Part payment be accepted at common law to clear a debt ?
if fresh consideration is given
What does the Pinnel case define as fresh consideration
Early payment for example was held to be a ‘new element’ which clearly would benefit the creditor and would therefore amount to consideration for the promise to accept a lesser sum.
It is stated in the case that ‘a hawk, a horse, or a robe may clear the debt but an offer of 19s 6d in the £1 on the due date at the appointed place will not suffice’.
What was the reasoning in Sibree v Tripp (1846
But if you substitute a piece of paper or a stick of sealing wax, it is different, and the bargain may be carried out in its full integrity. A man may give, in satisfaction of a debt of £100, a horse of the value of £5, but not £5. Again, if the time or place of payment be different, the one sum may be in satisfaction of the other.’
What were the facts in DC Bulders v Rees
Builders did a job for def. The def knew they were struggling financially so agreed to pay a smaller amount by cheque instead of cash. They argued part payment by cheque (a negotiable instrument) instead of cash was fresh consideration. was also argued that the builders’ promise to accept the cheque meant that they were precluded, by the doctrine of promissory estoppel, from recovering the balance of the debt.
Court found against them as they had taken advantage and cheque was the same as cash - not fresh consideration
How did Lord Selbourne distinguished the Sibree case from Builders v Rees
He said that in no way in 1965 could it be better to have a cheque for a lesser amount than to have the whole amount in cash.
In what situation can the Payment of a lesser sum mean the creditor cant sue for difference? Name a case
Ifit is given by a third party - Welby v Drake (1825)
What were the facts in Welby v Drake (1825) ?
the defendant’s son owed the plaintiff £18. The defendant’s father then made an agreement with the plaintiff whereby he promised to pay him £9 in return for the plaintiff’s promise to receive it in full satisfaction of his claim. The money was duly paid but the plaintiff still sued the defendant. Lord Tenterden maintained that, ‘if the father did pay the smaller sum in satisfaction of this debt, it is a bar to the plaintiff now recovering against the son because, by suing the son, he commits a fraud on the father, whom he induced to advance him money on the faith of such advance being a discharge of his son from further liability.’
