Promissory estoppel

Question 1

Hughes v Metropolitan Railway [1877]

failure to carry out repairs in time

Answer 1

• promissory estoppel can have a suspensory rather than extinctive effect, meaning that it suspends the original promise until the promise not to enforce it expires, rather than extinguishing the initial promise entirely even after the promise not to enforce it expires

Question 2

Central London Property v High Trees House [1947]

Denning J. obiter ‘if landlord had claimed…’

Answer 2

• sets down principle of promissory estoppel
• C estopped himself -> a party who promises not to enforce the contractual obligation of the other party is estopped from walking back on the promise provided that the promise not to enforce was relied upon

Question 3

Combe v Combe [1951]

‘shield not a sword’

Answer 3

• neither good consideration nor promissory estoppel available
• Promissory estoppel is not a cause of action
• it is a shield not a sword

Question 4

Chappell v Nestlé [1960]

chocolate wrapper - a contracting party can stipulate for what consideration they choose

Answer 4

• Nominal consideration (i.e. consideration of trivial value) is valid consideration
• such as chocolate wrappers

Question 5

Lipkin Gorman v Karpnale Ltd [1991]

casino chips

Answer 5

• chips were only a mechanism for facilitating gambling; the gambler did not buy them.
• Therefore, the club had not given valuable consideration

Question 6

Lampleigh v Brathwait [1615]

assumpsit, James I

Answer 6

• An act requested by the promisor with the understanding that it will be rewarded is valid consideration even if it were performed prior to the promise for reward being given
• doctrine of implied assumpit

Question 7

Ward v Byham [1956]

child was ‘well looked after and happy’

Answer 7

• Conferring a benefit that was obligated under statute is good consideration
• Consideration need not be of financial value
• even though it is required by statute, it is sufficient

Question 8

Pao On v Lau Yiu [1980]

PC said i) performed the act at the promisor’s request; (ii) it was clearly understood (implied) at the time of the request that the claimant would be rewarded for the act; and (iii) the eventual promise is one which would have been enforceable if it had been made at the time of the act

Answer 8

• 3 requirements for implied assumpit
• Commercial pressure, such as a threat to abandon a transaction, does not equate economic duress

Question 9

Williams v Roffey Bros [1991]

Glidewell LJ ‘practical benefit’ in contract renegotiation

Answer 9

• A promise to pay more for the performance of existing contractual obligations is binding if such a promise confers a “practical benefit”
• A promise to perform one’s existing contractual duty to the promisor is good consideration for a promise of additional payment if the promisor obtains some “practical benefit” or obviates a disbenefit

Question 10

Re Selectmove [1995]

Peter Gibson LJ ‘To treat ‘practical benefit’ as consideration would leave Foakes v Beer without any application – a matter for the House of Lords or Parliament

Answer 10

• The doctrine of practical benefit introduced in Williams v Roffey does not extend to promises to accept less
• Foakes v Beer was a HoL case, this was a CoA case -> doctrine of precedent meant they couldn’t overrule Foakes

Question 11

Collier v Wright [2008]

Arden LJ - C’s ‘reliance’ is satisfied by making part-payment of his debt; that reliance makes it automatically ‘inequitable’ for W to resile from his promise. Not accepted by CoA in MWB

Answer 11

• if a debtor offers to pay part of debt, the creditor voluntarily accepts, and in reliance of the acceptance the debtor pays the part in full, the creditor is bound by promissory estoppel to accept it as satisfaction of the whole debt
• That reliance makes it inequitable for C to resile from his promise

Question 12

MWB v Rock Advertising [2017]

Lord Sumption comments on Roffey and ‘Foakes v Beers is ‘probably ripe for re-examination’

Answer 12

• C and D entered into a licensing agreement with anti-oral variation clause (which excludes variation of contract terms by oral agreement)
• After D ran into financial trouble and started missing payments, C agreed over phone to change agreement
• C later claimed that D breached the original contract by making insufficient payment, removed D from premises and initiated proceedings to claim arrear
• CoA held a practical benefit was conferred
• SC held that there was no practical benefit for promise to accept less