Question is therefore intervening to justify the outcome. Lord

Question

The doctrine of promissory estoppel prevents
(estops) a claimant from going back on a promise and has been described as a
‘shield and not a sword’.

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Undertake an
evaluation of this statement using related case law.

(100 marks)

Much of the common law is derived
from judicial decisions of courts in form of precedents.  Over the time, law can be altered to mitigate
the harshness of outcomes. Promissory estoppel is a legal doctrine that can be
used to prevent a person claiming his legal rights against representation or
promisehe has madetoward another party if promiseehas acted on reliance of that
representation. A promise is enforceable if the claimant has shown
consideration with regards to the agreement between two parties however this is
not always the case. The court is therefore intervening to justify the outcome.

Lord Birkenhead defined doctrine
of Estoppel in Maclaine v Gatty 1921 1 AC 376,386:

                ‘…where
A has by words or conduct justified B in believing that a certain state of
facts exists,     and B has acted upon such
belief to his prejudice, A is not permitted to affirm against B that        a different state of facts existed at the
same time…’ 1

The importance of equitable
estoppels was considered in Crabb v Arun2, where claimant has acted
upon the initial arrangement between two parties but later on the defendant
changed their mind. Lord Denning MR pointed out that claimant suffered
detriment in the course of argument for five or six years with no access to his
property as therefore claimant will have the court order in his favour.

The equitable doctrine of
promissory estoppel happens when there is a contractual relationship between
the promisee and the promisor either in context or words of mouth, even when
there is no consideration provided.

In order for promissory estoppel
to be considered they must contain these following elements:

·        
The promisor must somehow generate an assumption
in the mind of promisee, usually implied or expressed terms. The assumption may
be one of fact or law, present or future. In the nature of belief, promisee
assumingpromisor willnot intend to enforce his legal rights. (Collin v Duke of
Westminster 1985 QB 581)

·        
The promisee must have taken actions relied on
the assumption made by promisor. Very often, the promisee would suffered
detrimentsor where he alters his positions.

In Alan Co. Ltd v El Nasr Export & Import 3,
it held that detriment is not an essential element of promissory estoppel.
Thus, for an appeal of promissory estoppel it must subsequently change the
environment of promisee.

·        
It must be inequitable for the promisor to go
back on his promise with respect to the promisee who has reliance on the
representation. (D & C Builders v Rees 1965 2 QB 617)

·        
It is an equitable doctrine, it is available
only at the discretion of the court. The general equitable maxim that ‘equity
is a shield, not a sword’. It does not create new rights. (

Combe v Combe 1951 2 KB 215)

 

 

Central London Property Trust Ltd
v High Trees House Ltd4

Facts: The plaintiff let a block
of flats to the defendant for 99 years lease with £2500 per year. There were
not enough tenants during the war. The plaintiff decided to halve the rent to
attract more tenants. After the war, the block is full of tenants so the
plaintiff asked the defendant to resume paying the original rent however it was
refused.

Issue: Could the promise be
enforced with no consideration provided ?

Held: The representation made by
plaintiff was to the future, which suspended strict legal right to obtain the
full rent during wartime. The decision was enforceable, as long as the
conditions that led to the promise prevailed. So therefore after the period of
the war, the plaintiff could claim the original rent.

The decision outlined some key
elements of the doctrine of the promissory estoppel:

·        
There must be a promise to waive strict legal
rights

·        
The promise must be intended to be bound by
legal actions

·        
Actions relied on the representation of the
promise, not essentially caused preventable harm.

·        
The promise does not give rise to a cause of
action but the court can give order to promisor acting consistently with the
promise.

Promissory estoppel is an
equitable doctrine so therefore only acts a shield not a sword. It is generally
operate to suspend legal rights.

Combe v Combe  1951 2 KB 215

Facts: During divorce proceedings
between husband and wife, the husband promised to make maintenance payment to
the wife. The defendant failed to act consistently for his promise. The
plaintiff is however in better financial situation and did not chased for the
money until few years later. The plaintiff sought to use promissory estoppel as
a sword not a shield.

Issue: Was the promise enforceable?

Held: The plaintiff could not
take advantage of equitable doctrine of promissory estoppel to create cause of
action where none existed before but only to defence waived legal rights.

 

 

 

 

 

 

Bibliography

·        
Law of Contract by Michael Furmston (2017) 107,
132-9

·        
Contract Law by Emily Finch and Stefan Fafinski
(2017) 50

1  
Contract Law by Ewan McKendrick (2017) 98.

 

Case Law

2Crabb v Arun District Council
(1976) 1 CA Ch 179

3   Alan
Co. Ltd v El Nasr Export & Import (1972) 2 QB 18

4Central London Property Trust Ltd v High Trees
House Ltd 1947 1 KB 130

 

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