Document (9) Na Law HW
Document (9) Na Law HW
Document (9) Na Law HW
In Dunlop v Selfridge (1915) the House of Lords explained consideration in terms of purchase
and sale – the claimant must show that he or she has bought the defendant’s promise, by doing,
giving or promising something in return for it. Atiyah has suggested that consideration can
simply be seen as ‘a reason for the enforcement of promises’, with that reason being ‘the justice
of the case’. In other words the mere fact of an agreement alone does not make a contract both
parties to the contract must provide consideration if they wish to sue on the contract. However
there are always exceptions when it comes to the law. Consider the doctrine of Promissory
Estoppel , this doctrine provides a way in which promises are made binding in certain
circumstances where there is no consideration. This principle derived from equity the promisor
makes a promise, which another person acts on, the promisor is stopped (estopped) from going
back on the promise although no consideration as “it is inequitable to do so” thus sometimes
known as equitable estoppel. Although The precise extent of the doctrine of promissory estoppel
is unclear. What is clear is that the following conditions must be fulfilled before the doctrine can
revert, a shield or a sword and distinctive or suspensive of rights. There must be an obvious and
unambiguous promise not to enforce a person’s full legal rights. there must already be a
Promissory estoppel can be raised.This promise may be implied from conduct, but silence, or
failure to act, will not usually be sufficient. In China-Pacific SA v Food Corp of India (1980), the
parties had been involved in a complex commercial dispute, entailing a great deal of
correspondence and discussion. The defendants claimed that the contents of one of the letters,
and remarks made during a discussion between the two parties’ barristers, provided grounds for
promissory estoppel. On the facts of the case, the claim was rejected, as no unambiguous
it is not entirely clear whether or not an act of reliance has to be something which would put
the promisee at a disadvantage if the promisor decided to reclaim their legal rights, or whether
it can simply be some act which otherwise would not have happened. In Hughes, the tenants’
failure to make repairs because they were relying on the landlord not to enforce the forfeiture
clearly put them at a disadvantage, and in Tool Metal Manufacturing, Lord Tucker suggested that
Promissory estoppel can usually only be used to prevent rights being exercised for a period of
time; it cannot destroy them for ever. This was stressed in Tool Metal Manufacturing Co Ltd v
Tungsten Electric Co Ltd (1955). A licence for the use of a patent provided that the licensees
had to pay ‘compensation’ if they manufactured more than the agreed number of items using
the patent. In 1942, owing to the war, the patent owners agreed to forego their right to ‘com-
pensation’ in the national interest, with a view to a new agreement being made after the war.
When the war was over, the patent owners had problems getting the licensees to make a new
agreement, and eventually claimed the compensation that would have been due from the time
the war ended.The court held that the patent owners’ promise was binding during the specified
period, so they could not get back any money that would have been due if the agreement had not
been made; but they could revive their legal entitlement to receive the compensation payments
after that period, on giving reasonable notice to the other party. In other words rights can be
revived for the future but not claimed back for the past.
Inequitable to revert, As an equitable doctrine, promissory estoppel will only be applied where it
would be inequitable for the promisor to go back on what was promised, and insist on their strict
legal rights. If the party claiming promissory estoppel has acted in such a way that it would be
inequitable to allow them to take advantage of it, the doctrine will not be applied. This was the
situation in D & C Builders v Rees (1966). Mr and Mrs Rees could not rely on promissory
estoppel because of their own behaviour they had deliberately taken advantage of the builders’
financial problems, effectively holding them to ransom and there was also evidence that they had
misled the builders about their own financial position, suggesting that they could not afford the
whole price when in fact they were well able to pay. Given such behaviour it would be
inequitable to allow them to rely on promissory estoppel. Lord Denning stated obiter that if the
party claiming promissory estoppel has acted in such a way that it would be inequitable to allow
him or her to take advantage of the doctrine, then the doctrine will not be applied.
Promissory estoppel cannot be used to create entirely new rights or extend the scope of existing
ones, only to prevent the enforcement of rights already held it has been described as being ‘a
shield and not a sword’. This can be seen in Combe v Combe (1951) a husband and his wife
were involved in divorce proceedings, during which he promised to pay her an annual allowance.
She later brought an action to enforce this promise and argued, among other things, that she had
given consideration for it by not exercising her right to apply to the court for a maintenance
order. it was held that this could not be consideration because her husband had not asked her not
to apply to the court, and therefore his promise had not been made in return for her promising not
to do so. Since there was no contract between them, Mrs Combe did not have a legal right to the
payments her husband promised, even though she had relied on his promise in not applying for a
maintenance order.
Karen leashed a block of flat from ABC limited at a ground rent of 4500. It was a new
block of flats at the time the lease was taken out in 1995. In 2007 many of the flats from
ABC limited agreed to reduce the rent to 2,500 the agreement was put in writing and
Karen paid the reduce rent from 2007.When the economic crisis ended in 2012, the flats
became fully occupied and the ABC limited slighted to return to the original agreed rent of
The case presented is very similar to that of Central London Property Trust Ltd v High Trees
House Ltd (1947). The claimant owned a block of flats. In September 1939, it had leased the
block to the defendant, who planned to rent out the individual flats, e Second World War had just
broken out, and many people left London, making it difficult to find tenants. As a result, many of
the flats were left empty. The claimant therefore agreed that the defendant could pay just half the
ground rent stipulated in the lease. By 1945, the flats were full again, and the claimant sought the
full ground rent for the last two quarters of 1945. The claimant stated that the agreement was
only ever intended to last until the war was over, or the flats fully let, whichever was the sooner.
Both events had happened by the time payment for the last two quarters of 1945 were due, and
so the company believed it was entitled to full payment for that period. Denning J declared that
the landlord’s claim for its full contractual rights for the period 1940–45 had been destroyed by
accepting the reduced rent for the wartime period, it lost its right to claim for arrears of rent,
rather than simply suspending this right until the tenant could afford to pay. Under the doctrine
of promissory estoppel, a contracting party who promises not to enforce a contractual right will
not be able to enforce that right later if it would be inequitable to do so, and the promise has been
Evidently in the case of Karen v ABC limited the facts seems to be in accordance with one
another as there was an agreement between both parties to reduce the rent to 2,500 as many of
the flats were still unoccupied due to the economic crisis at this point ABC limited had promise
not to enforce the 4,500 due to the financial crisis thus ABC limited contractual rights had been
destroyed during the years 2007 to 2012 by accepting the reduce rent during the financial crisis
thus cannot claim for remaining rent during that time period as Karen acted in reliance on the
promise, in the sense that it influenced Her conduct. For example, Karen continued to rent out
the flats, rather than, for example, trying to sell her leasehold interest to someone else. However
this agreement would be only binding through the years where financial crisis was present as
their promise was solely based on those condition the ABC limited only suspended their
contractual rights during the years 2007 -2012 as the financial crisis was ended and Karen no
In conclusion Karen is liable to pay ABC Limited the original agreed rent of 4,500 as the
circumstances that made her relied on the reduce rent of 25,000 no longer exist
In order for any agreement to be deemed legally binding, it must include consideration on the
part of every person or company that enters the contract.It distinguishes a bargain or contract
from a gift. Lush J in the case of Currie v Misa (1875) referred consideration consist of a benefit
to the promisor or a detriment to the promisee as “some right, interest, profit or benefit accruing
to one party, or some forbearance, detriment and loss or responsibility given, suffered or
undertaken by the other". In the case of Currie v MisaA company named Lizardi and Co,then in
good credit in the City, sold four bills of exchange to Mr Misa drawn from a bank in Cadiz. Mr
Currie was the owner of the banking firm and the plaintiff bringing the action. The bills of
exchange were sold on the 11th of February and by the custom of bill, brokers were to be paid
for on the first foreign post-day following the day of the sale. That first day was the 14th of
February. Lizardi & Co. was much in debt to his banking firm, and being pressed to reduce his
balance, gave to the banker a draft or order on Mr Misa for the amount of the four bills. This
draft or order was dated on the 14th, though it was, in fact, written on the 13th, and then
delivered to the banker. On the morning of the 14th the manager of Misa's business gave a
cheque for the amount of the order, which was then given up to him. Lizardi failed, and on the
afternoon of the 14th the manager, learning that fact, stopped payment of the cheque. Lush J,
Archibald J, Quain J held that the banker was entitled to recover its amount from Mr Misa. Lord
Coleridge CJ dissented. Through this case the true profound meaning of consideration was
outlined.
Jack asks Hugo, his brother, to keep a special eye on his home while he is always on a
“I will settle you when I return, but do not go overboard. Do not spend more than $1500
Upon Jack's return, he pays Hugo $1500 and promises him a further $500. When Hugo
With reference to atleast one decided case, advise Hugo whether he is entitled to the money
from Jack.
The case sited above seems to have fallen under the principle where consideration must not be
consideration.Consideration must be given in return for the promise or act of the other party
something done, given or promised for another reason will not count as consideration. As we
know exceptions always arises in the face of the law it is said where the promisor has previously
asked the other party to provide goods or services then a promise made after they are provided
In the case provided we observed that Jack and Hugo had a contractual agreement where Hugo
was asked to provide consideration that consideration being “keeping an eye on Jack’s home and
Jack's consideration being the payment for his services on his return. On his return Hugo had
provided consideration and Jack paid him his 1500 and promises to give him a further 500 is at
this point the exception under past consideration arises where a services was provided and under
it's provision a promise was made thus the promise of the further 500 is treated as binding to
further understand the principle outlined in the aforementioned statement consider the case
Lampleigh v Braithwait The defendant, Braithwaite, killed a man. He asked the plaintiff,
Lampleigh to secure him a pardon from the king. The plaintiff spent many days doing this, riding
and journeying at his own cost across the country to where the King was and back again.
Afterwards, the defendant promised to pay the plaintiff 100 in gratitude. He later failed to pay
the money. The plaintiff sued. It might appear that Lampleigh’s consideration was past, since he
had secured the pardon before the promise to pay was made. In fact, the court upheld
Lampleigh’s claim. It reasoned that Lampleigh had obtained the pardon at Brathwait’s own
request and this request carried with it the unspoken understanding that the service would be paid
for. Lampleigh obtained the pardon after, and in return for, this implied promise to pay, and so
obtaining the pardon was good consideration for the promise to pay. The later promise,
specifying that 100 would be paid, was said to be merely confirmation of the original, unspoken
one.
Past consideration is sufficient when it is provided at the promisor’s request and it is understood
that payment will be made in return. Therefore Hugo is entitled to the money from Jack as a