Business Law
Question 1
In this question, after the completion of the MRT train station, the owner of a building is attempting to raise the promised discounted rental fees back to the normal rate, as well as recover the accumulated discounted amount for the 3 years which he had promised Roy and other tenants, in order to deter them from moving out. So in essence, I will be discussing whether or not the owner is allowed to raise the rent back to the original amount, and also whether or not he can recover the accumulated discounted amount.
Whether or not the owner of the building can do this, we will look at a principle called Promissory Estopple. Promissory Estopple refers to when a party is stopped from going back on his promise if that promise has been acted upon by the party whom the promise was made to. This is binding to the promising party so as to prevent the promisee from suffering any form of injustice.
In the case before us, Roy is a rent-paying tenant in a condominium that is situated near a construction site for an MRT train station. The second year into the construction, the level of noise and dust from the site increased to such an unbearable state that Roy and other tenants were looking to move out of the condominium. In a bid to prevent all these people from moving out, the owner of the building offered to halve the current rent all the tenants were paying, from $5, 000 to $2, 500.
The MRT train station took another 3 years to complete, all the while with the tenants paying the rent of $2, 500. At this point of time, the owner of the building decided to raise the rent back to the original amount of $5, 000, as well as recover the total amount of the discounted rate all the tenants were offered during the period when the construction was still ongoing.
This is where the principle of Promissory Estopple comes to play. Roy and the other tenants had every intention of moving out of the condominium due to the nuisances caused by the then ongoing construction of
In this question, after the completion of the MRT train station, the owner of a building is attempting to raise the promised discounted rental fees back to the normal rate, as well as recover the accumulated discounted amount for the 3 years which he had promised Roy and other tenants, in order to deter them from moving out. So in essence, I will be discussing whether or not the owner is allowed to raise the rent back to the original amount, and also whether or not he can recover the accumulated discounted amount.
Whether or not the owner of the building can do this, we will look at a principle called Promissory Estopple. Promissory Estopple refers to when a party is stopped from going back on his promise if that promise has been acted upon by the party whom the promise was made to. This is binding to the promising party so as to prevent the promisee from suffering any form of injustice.
In the case before us, Roy is a rent-paying tenant in a condominium that is situated near a construction site for an MRT train station. The second year into the construction, the level of noise and dust from the site increased to such an unbearable state that Roy and other tenants were looking to move out of the condominium. In a bid to prevent all these people from moving out, the owner of the building offered to halve the current rent all the tenants were paying, from $5, 000 to $2, 500.
The MRT train station took another 3 years to complete, all the while with the tenants paying the rent of $2, 500. At this point of time, the owner of the building decided to raise the rent back to the original amount of $5, 000, as well as recover the total amount of the discounted rate all the tenants were offered during the period when the construction was still ongoing.
This is where the principle of Promissory Estopple comes to play. Roy and the other tenants had every intention of moving out of the condominium due to the nuisances caused by the then ongoing construction of
References: 1. Murdoch University, Business Law Study Guide, Mr Robin Peter Lange 2. http://answers.yahoo.com/question/index?qid=20071208063150AASvqyt 3. http://en.wikipedia.org/wiki/Consideration_in_English_law 4. http://www.mateoaboy.com/f6/blog_files/be9debe290ff9580bb8e5ba95217e33e-98.html