Promissory estoppel CASES
In English law, promissory estoppel prevents a party from going back on a promise, even without formal consideration, if the other party has reasonably relied on that promise to their detriment.
Definition and Principles
Promissory estoppel arises when one party clearly promises to waive or suspend certain legal rights, and the other party relies on this promise, altering their position as a result. The doctrine ensures fairness by preventing unjust or inequitable outcomes.
Key Conditions
- Clear Promise: A definite and unambiguous promise or representation.
- Reliance: The other party must have acted in reliance upon that promise.
- Inequity: It must be unfair or unjust for the promisor to break the promise.
Limitations
Promissory estoppel is typically a defensive remedy, preventing enforcement of certain rights rather than creating new obligations. It usually suspends rights temporarily rather than extinguishing them permanently.
Practical Importance
Promissory estoppel reinforces equitable fairness in commercial dealings, encouraging honesty and preventing unfair exploitation of informal agreements.
Home » Promissory estoppel
Coffee sellers accepted payment via a letter of credit in Sterling, despite the contract currency being Kenyan shillings. After Sterling was devalued, they claimed the shortfall. The court held they had permanently waived their right to the original currency by their conduct. Facts The sellers, W.J. Alan & Co. Ltd., contracted to sell coffee to the buyers, El Nasr Export & Import Co., an Egyptian state corporation. Two contracts from May 1967 stipulated the price as “Shs.262/-” per hundredweight (cwt), which was denominated in Kenyan shillings. Payment was to be made via an irrevocable letter of credit. The buyers opened
A patent holder agreed to suspend compensation payments from a licensee during the war. After the war, they sought to resume payments. The House of Lords held their promise was terminable by giving reasonable notice, confirming promissory estoppel suspends, not extinguishes, rights. Facts In 1938, the appellants (Tool Metal Manufacturing Co Ltd, ‘TMM’) granted the respondents (Tungsten Electric Co Ltd, ‘TECO’) a licence to import, make, use, and sell hard metal alloys protected by TMM’s patents. The agreement stipulated that if TECO’s monthly sales exceeded a specified quota, they were required to pay ‘compensation’ to TMM. Following the outbreak of
Jorden repeatedly assured Money she would not enforce a debt, inducing Money to marry. The House of Lords held this statement of future intention was not a misrepresentation of existing fact, so did not create a legally binding estoppel. Facts The respondent, Miss Louisa Money, was contemplating marriage. Her brother, Charles Money, was indebted for £1200 to the family of the appellant, Mrs. Jorden. This debt, secured by a bond, was a subject of concern during the marriage settlement negotiations. Mrs. Jorden repeatedly and explicitly assured Miss Money, her solicitor, and others that she would “absolutely and entirely abandon the
A landlord gave a tenant six months' notice to repair a property. During this period, the parties entered negotiations to sell the lease. The House of Lords held the negotiation period suspended the notice, establishing an early form of promissory estoppel. Facts In 1845, a lease was granted for premises at 21, 22, and 23 Euston Road, containing a covenant for the lessee to keep the premises in good repair. The appellant, Mr Hughes, was the lessor and the respondent, The Metropolitan Railway Company, was the lessee. On 22 October 1874, the lessor served the lessee with a notice to
A small building firm was owed £482. The debtor's wife, knowing the builders were in financial difficulty, offered £300 in 'full settlement'. The builders accepted under pressure. The court held that this did not extinguish the debt, as the agreement was obtained by intimidation. Facts D & C Builders Ltd, a small building company, performed work for Mr Rees amounting to £746 13s. 1d. Mr Rees paid £250 on account, leaving a balance of £482 13s. 1d. Despite several requests for payment, the balance remained unpaid. The builders were in a desperate financial situation. Mrs Rees, acting for her husband,
An estranged husband promised to pay his wife an annual allowance. The wife did not apply for court-ordered maintenance in reliance on this. The husband failed to pay. The court held promissory estoppel could not create a cause of action. Facts Following their separation and during divorce proceedings, a husband’s solicitor wrote to his wife’s solicitor promising that the husband would pay the wife an annual allowance of £100, free of tax. The wife had a higher income than the husband. In reliance on this promise, the wife did not apply to the Divorce Court for a maintenance order, which
A landlord promised to accept reduced rent during WWII due to low occupancy. Although this promise lacked consideration, the court held it was temporarily binding. The case established the modern doctrine of promissory estoppel, preventing a promisor from unenforceably reverting to strict legal rights. Facts In 1937, the plaintiff, Central London Property Trust Ltd., let a block of flats in London to the defendant, High Trees House Ltd., on a 99-year lease at a ground rent of £2,500 per annum. Following the outbreak of the Second World War and the resulting difficulty in letting the flats, the parties made an
