Promissory Estoppel

Question 1

What is promissory estoppel?

case

Answer 1

• if parties enter into a contract
• and after of their own act or own consent
• enter negotiations which
• lead one party to suppose strict rights under contract won’t be enforced
• the person who otherwise might have enforced those rights
• won’t be able to enforce them -> where it would be inequitable

Hughes v Metropolitan Railway Co. (1877)

Question 2

Which case lays down official principle of promissory estoppel?
what is it?

Answer 2

• established that a promise intended to be binding
• intended to be acted upon
• and in fact acted upon
• is enforceable even if there is no consideration

Central London Property Ltd v High Trees House Ltd [1947]

Question 3

What are the requirements of promissory estoppel?

Chen-Wishart

Answer 3

• A makes a clear promise to B she will not enforce her strict legal rights
• B acts in reliance to it
• it would be inequitable for A to resile from the promise

Question 4

Effects of promissory estoppel

Chen-Wishart

Answer 4

• generally suspensory and not extinctive
• restricted to act defensively (shield) not offensively (sword)

Question 5

Key difference between consideration and promissory estoppel

Answer 5

Consideration is both a shield and a sword

Question 6

What type of doctrine is it?

Answer 6

equitable

Question 7

What is promissory estoppel used for?

case

Answer 7

• modify obligations in existing contracts
• NOT to create new obligations / new contracts

Combe v Combe [1951]

Question 8

What are the requirements for promissory estoppel?

Answer 8

1. clear and unambigious representation
2. representee relies on representation
3. inequitable to go back on promise

Question 9

What can promissory estoppel not be founded on?
why not?

case

Answer 9

• a promise induced by promisee’s inequitable conduct (such as in the form of economic duress)
• 3rd requirement for PE is for it to be inequitable to go back on promise -> here it would be equitable because there was duress, so no PE

D & C Builders v Rees [1965]

Question 10

Which case supports Combe that promissory estoppel is a shield only?

Answer 10

• Eyestorm Ltd v Hoptonacre Homes Ltd [2007]
• tried to use it as a sword

Question 11

Does the concept of ‘shield only’ apply everywhere?

Answer 11

• No
• Waltons Stores (Interstate) Ltd v Maher (1987)
• Australian case where it is recognised that PE can be used to create a new cause of action -> in certain circumstances

Question 12

What type of relationship is required for PE?

case

Answer 12

a pre-existing one

Baird Textile Holdings Ltd v Marks & Spencer [2001]

Question 13

When does PE apply with regards to misrepresentation?

case

Answer 13

• misrep with regards to existing facts, not future conduct
• ## for a binding agreement to be created, there needs to be a clear and formal agreement, not just a verbal statement of intention

Jorden v Money [1854]

Question 14

Which type of estoppel prevents either party from denying a common mistaken assumption?

case

Answer 14

• estoppel by convention
• where parties to a transaction have acted upon a common assumption due to mistake or misrep.

Question 15

What is the role of consideration vs the role of PE?

Answer 15

• consideration: yields a contractual cause of action for the enforcement of the promisee’s full expectation
• PE: seeks to avoid the detriment arising from the promisee’s reliance on the promise -> if it would be inequitable for promisor to renege

Question 16

Can PE be extinctive, or is it only suspensory?

case

Answer 16

in certain circumstances, it can be extinctive

Collier v P & MJ Wright [2007]

Question 17

case for PE requiring clear and unambigious wording

Answer 17

• Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co [1972]
• requires a clear and unequivocal promise

Question 18

What type of reliance must there be for PE?
cases

Answer 18

• detrimental reliance:
• High trees
• Ajayi v Briscoe [1964] -> D didn’t prove an altered position due to reliance so no PE