Please enable JavaScript.
Coggle requires JavaScript to display documents.
CONSIDERATION - Coggle Diagram
CONSIDERATION
PROMISSORY ESTOPPEL
Key Facts:
- created when monetary compensation wasn't always appropriated
Definition = if one party to a contract promises the other he will not insist on his strict legal rights in the contract, he cannot charge his mind and enforce the original terms
- leading case = High Trees (1947), relied upon the earlier case of Hughes v Metropolitan Railway (1877)
- "estoppel is a mechanism for enforcing consistency" - E. Cooke (2000)
Criticism
- High Trees seemed to destroy the doctrine of consideration; suggested that all that's needed for a promise to be enforceable is reliance on said promise
- promissory estoppel appears too broad
Conditions
- Must be an existing legal relationship
- Must be reliance that parties took action on
- Shield not a sword
- Inequitable for the promisor to go back on the promise
- Only suspensory in effect
3. Shield not Sword
can only be used defensively; against someone's assistance against their full rights
-
2. Reliance
You don't have to act in your own detriment to have promissory estoppel
- Alan Co Ltd v El Nasr & Import Co (1972)
5. Suspensory in Effect
Promissory estoppel suspends rights but doesn't necessarily extinguish them; suspensory rights are resumed on
- cessation of circumstances giving rise to the estoppel; High Trees (1947) OR
- giving reasonable notice; - Tool Metal Manufacturing Co Ltd v Tungsten Electric Co (1955)
"precise effect of promissory estoppel...will depend on the nature of the promise and the type of contract"; finds a way around part-payment of a debt
- Collier v P & MJ Wright (Holdings) Ltd (2007)
1. Existing Legal Relationship
"consideration remains a necessity for the formation of a contract but not for its formation of discharge"; Denning LJ
- Combe v Combe (1951)
PART-PAYMENT OF A DEBT
Part-payment of a debt on the day its due can never be satisfaction for the full amount owed
- creditor will be able to recover the balance unless consideration is shown
- Pinnel's Case (1602): "the gift of a horse, hawk or robe, etc in satisfaction is good...more beneficial to the plaintiff than money"
- leading case = Foakes v Beer (1884)
When good consideration is allowed
- If the debt is paid by a 3rd party on your behalf; Welby v Drake (1825)
- payment a day early; Pinnel (1602)
- any good or service other than money; Pinnel (1602)
Controversies
- Potential clash on the matter of practical benefit as Foakes v Beer (1884) suggests practical benefit cannot be applied in the case of part-payment of a debt, whereas Williams v Roffrey (1989) accepts practical benefit can amount to consideration
- Re Selectmove (1993) said had to consider whether the ruling in Williams v Roffrey (1989) applied, and HL said if it did apply that would overrule the ruling in Foakes v Beer (1884); "to extend the principle of Williams v Roffrey to any circumstance [is] governed by the principle of Foakes v Beer" -- Gibson LJ
- MMV v Rock Advertising (2018) challenges the rule, as CA did initially find that there was practical benefit which should be taken into account. However the SC ruled against this overruling of Foakes v Beer (1884)
- Collier v Wright (Holdings) Ltd (2007) suggests that promissory estoppel finds a way around the rule concerning part-payment of a debt because allows part-payment of a debt to be sufficient.
-weak authority as in this case Collier only needed to show there was a 'genuine triable issue'
-
Key Facts:
Definition = "an act or forbearance of the one party or the promise thereof, is the price for which the promise of the other is bought, and the promise thus given for the value is enforceable"
- Dunlop v Selfridge(1915)
2. PAST CONSIDERATION
Consideration must be given at the time of contract or at some point after the contract is made
- rationale = the service is unrequested; the performer of the act took the risk of non-payment
- Roscorla v Thomas (1842)
- Re McArdle (1951)
Exceptions
Act must be done at the promisor's request
- Lampeigh v Braithwaite (1615)Parties must have understood that the act was to be remunerated
- Casey's Patents (1892)
4. THIRD PARTY DUTIES
Performance of an existing contractual duty owed to a third party can be good consideration
- Scotson v Pegg (1861)
- Shadwell v Shadwell (1860)
- The Eurymedon (1975)
1. ADEQUACY V SUFFICIENCY
Consideration need not be adequate (economically), but it must be sufficient (legally)
- freedom of contract
Key Cases:
- Thomas v Thomas (1842)
- Chappell & Co Ltd v Nestle Co Ltd (1959)
- White v Bluett (1853)
- Hadley v Kemp (1999)
3. PUBLICLY OWED DUTIES
Where the promise/ promisor agrees to do something he/she is already obliged to do something as a matter of public duty, the courts will usually find a lack of consideration
- Collins v Godfrey (1831)
- Ward v Byham (1956); ruled there was consideration because Ward went beyond her duty
- Glasbrook Bros v GCC (1924); ruled that the police went beyond their duty
- Harris v Sheffield United FC (1987)