Flashcards in BPP Manual Ch 6: Part Payment of Debts & Promissory Estoppel Deck (17)
What is the basic principle relating to part payment of debts?
- part payment does not discharge the debtor's obligation to pay the balance
- under common law, debtor remains liable even if creditor releases them from the rest because they have offered no consideration for this release.
What case articulated the genreal principle of part payment of debts?
What case confirmed the general principle of part payment of debts?
Foakes v Beer
How is Foakes v Beer distinguished from Willams v Roffey?
Williams v Roffey could apply to a promise to pay more but Foakes v Beer to a promise to accept less
How could part payment of a debt discharge an obligation to pay the rest?
- Pinnel's Case
- if there is a fresh consideration from the promisee/debtor
- this consideration could be payment at a different place/time/in a different etc
What is the consequence if a creditor accepts part payment by a third party for money owed by a debtor?
Welby v Drake
- creditor could not then sue the debtor for the remaining money.
What case does the modern doctrine of promissory estoppel derive from?
Hughes v Metropolitan Railway Co.
What is the purpose of promissory estoppel?
- protect debtors who have relied on creditors' promises that they would accept less payment
- prevent a party from relying on strict legal rights when it would be unjust to allow him to do so (Combe v Combe)
What ratio arose from Central London Property v High Trees House?
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.
What was decided about how promissory estoppel could be used in Combe v Combe?
- must be a shield and not a sword
- can only be a defence, not a cause of an action
What requirements must be met in relation to the promise made for promissory estoppel to be relied upon?
- must be a clear unequivocal promise that existing legal rights would not be fully enforced
- must be intended to affect legal relations and not be a gratuitous privilege
- (Hughes v Metropolitan Railway) need not be express but can be implied
Can the requirement for a clear unequivocal promise be used to deny the opportunity to rely on promissory estoppel?
yes - Woodhouse AC v Nigerian Produce Marketing.
the creditor's statement was to ambiguous to found an estoppel claim
What case stated that promissory estoppel could only be a shield and not a sword?
Combe v Combe
What case demonstrates the need for the debtor to have relied upon the promise to claim promissory estoppel?
- Emmanuel Ayodeji Ajayi v R.T. Briscoe (Nigeria)
- the debtor did not act differently in reliance on the creditor's promise to allow them to withold payments
Must the promisee always act to his detriment?
- No: Alan v El Nasr Export & Import
- but hard to establish that it would be inequitable for the promisor to go back on their promise if the promisee has not acted to their detriment. The Post Chaser
What case demonstrated that promissory estoppel would not be applied if it was inequitable to the promisor/creditor?
- D & C Builders v Rees
- promise was extracted from the creditor by intimidation and with awareness of their financial cirumstances
- promisee therefore could not rely on equitable principles