BPP Manual Ch 6: Part Payment of Debts & Promissory Estoppel

Question 1

What is the basic principle relating to part payment of debts?

Answer 1

• 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.

Question 2

What case articulated the genreal principle of part payment of debts?

Answer 2

Pinnel’s Case

Question 3

What case confirmed the general principle of part payment of debts?

Answer 3

Foakes v Beer

Question 4

How is Foakes v Beer distinguished from Willams v Roffey?

Answer 4

Williams v Roffey could apply to a promise to pay more but Foakes v Beer to a promise to accept less

Question 5

How could part payment of a debt discharge an obligation to pay the rest?

Answer 5

• 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

Question 6

What is the consequence if a creditor accepts part payment by a third party for money owed by a debtor?

Answer 6

Welby v Drake

- creditor could not then sue the debtor for the remaining money.

Question 7

What case does the modern doctrine of promissory estoppel derive from?

Answer 7

Hughes v Metropolitan Railway Co.

Question 8

What is the purpose of promissory estoppel?

Answer 8

• 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)

Question 9

What ratio arose from Central London Property v High Trees House?

Answer 9

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.

Question 10

What was decided about how promissory estoppel could be used in Combe v Combe?

Answer 10

• must be a shield and not a sword

- can only be a defence, not a cause of an action

Question 11

What requirements must be met in relation to the promise made for promissory estoppel to be relied upon?

Answer 11

• 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

Question 12

Can the requirement for a clear unequivocal promise be used to deny the opportunity to rely on promissory estoppel?

Answer 12

yes - Woodhouse AC v Nigerian Produce Marketing.

the creditor’s statement was to ambiguous to found an estoppel claim

Question 13

What case stated that promissory estoppel could only be a shield and not a sword?

Answer 13

Combe v Combe

Question 14

What case demonstrates the need for the debtor to have relied upon the promise to claim promissory estoppel?

Answer 14

• 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

Question 15

Must the promisee always act to his detriment?

Answer 15

• 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

Question 16

What case demonstrated that promissory estoppel would not be applied if it was inequitable to the promisor/creditor?

Answer 16

• 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

Question 17

How can a promisor retract their promise that gives rise to promissory rights?

Answer 17

• Emannuel Ayodeji Ajayi v R.T. Briscoe (Nigeria)
• promisor can reslie from his promise on giving reasonable notice giving the promisee a reasonable time to resume his previous position
• unless the promisse cannot resume their previous position