Doctrine of Promissory Estoppel.

Topics: Contract, Contractual term, Sale of Goods Act 1979 Pages: 4 (1109 words) Published: December 6, 2005
To begin with, the case as regards Richard and Ernie is related to the Doctrine of Promissory Estoppel, which is derived from Equity. According to this doctrine, if one party to the contract (promisor) makes a promise which the other party to the contract (promisee) acts upon, the promisor is estopped from going back on his promise, even though the promise did not provide any consideration.

Theoretically, by this concept, Ernie should be estopped from asking Richard for the remaining balance of ₤140. The main reason is that Ernie promised to accept a smaller sum of ₤160 from Richard in full settlement, intending Richard to rely on that promise, so he cannot go back to the original promise of ₤300 as a full payment. Hereafter, a number of cases concerning this Doctrine shall be discussed as a reference in support of the case of Richard and Ernie.

One of the most important cases relevant to the case of Richard and Ernie is Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130, from which the Doctrine of Promissory Estoppel originated. The Court held that part of money as requested by the plaintiff, could be recovered. According to Lord Denning, if the plaintiff asked to claim the whole sum of money, he would fail to recover the money even though the defendant did not provide any consideration. It is because the plaintiff's contractual right for the whole sum of rent in 1940-5 was destroyed by agreeing to accept the reduced rent in the wartime. By the Doctrine of Promissory Estoppel, the plaintiff was estopped from getting the full rent in wartime, so he could only recover the rent after wartime. Referring to this case, it shows that in the case of Ernie and Richard, Ernie has no contractual rights to claim the remaining money.

There is another similar case, which is Tool Metal Manufacturing Co. Ltd v Tungsten Electric Co. Ltd [1955] 1 WLR 761 (HL). There was a term in the contract that the defendant had to pay compensation to the plaintiff...

Bibliography: Books
- Poole J., (2004), Casebook on Contract Law, 6th edition, Oxford, Hampshire.
- Richards P., (2004), Law of Contract, 6th edition, Pearson, Dorchester.
- Elliott C. and Quinn F., (2003), Contract Law, 4th edition, Pearson, Dorchester.
(1877) 2 App Cas 439 (HL)
Tool Metal Manufacturing Co
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