Pinnel's case and promissory estoppel

Topics: Contract, Contract law, English contract law Pages: 9 (2448 words) Published: April 22, 2006
Literature review:

Pinnel's Case was criticized of its unfairness judgment because Pinnel could go back on his promise that he had made to Cole.

There were 4 main criticisms responded to this rule which were stated by Hickling. The first criticism is that "The Rule Of Pinnel's Case" is a dictum. However, it had been used for 200 to 300 years until Dening J developed the promissory estoppel.

Next, it is also criticized as it illegally extended the doctrine of consideration from creating a contract to modifying a contract. The doctrine of consideration won't consider the past intention but "The Rule Of Pinnel's Case" won't consider the future intention.

However, in Khoury's & Yamouni's views, the court modified the doctrine of consideration and never revoked the rule in 200-300 years were because there was too much uncertainty in the future and the court was forced not to follow the doctrine.

Thirdly, it is criticized, as it will only produce ridiculous results if the promisor and promisee are left to put their own values on things, as consideration can be anything.

Lastly, "The Rule Of Pinnel's Case" is criticized, as it has no relation with commercial practice. It is because a lower value of thing can substitute the higher sum of payment. It is better for a creditor to receive a lower sum of money or to let the debtor facing bankruptcy.

In conclusion, although there are weaknesses in "The Rule In Pinnel's Case", it isn't completely useless because the judgment held at that time was forced by the environment and uncertainties.

Synopsis:

Consideration is one of the essentials that constituted a contract. It has to move from the promisee, however, it need not move to the promisor. A past consideration isn't acceptable. In the Pinnel's Case, the court held that Cole had to pay the outstanding sum to the Pinnel because of the lack of evidence. Since then, "The Rule In Pinnel 's Case" emerged and impacted on the doctrine of consideration.

To against the disadvantages of "The Rule In Pinnel 's Case", some exceptions were developed. It assisted the promisee and minimized the disadvantages that they might encounter. Promissory estoppel is one of the exceptions.

The doctrine of consideration was impacted by "The Rule In Pinnel 's Case". It was criticized for its existence because it can't be a good measure to distinguish the fairness and unfairness of a transaction. A consideration that can't be measured by dollar sign won't be considered as a good consideration for a promisor to keep his promise.

Dening J developed promissory estoppel to limit the traditional estoppel and to extend the doctrine. It is a good estoppel because it estopped the promisor from going back on his promise as long as the promisee has acted to his detriment on the promisor's promise. The cases of Foakes v Beer and High Trees Case were both about the breach of promises of the promisors. Both the promisees had acted on their detriment. However, only the promisee in High Trees Case was protected because of the doctrine of promissory estoppel.

The subsequent development followed the decision of Dening J and promissory estoppel was that promissory estoppel could be used as a shield as long as a sword to enforced the promisor to enter into a contract if the promisee had acted his detriment. It can be used to defense the promisee.

Introduction:

Contract is a binding agreement between two or more parties. It is constituted by 6 essentials, which are legality, intention to create legal relation, consideration, acceptance, capacity, and offer. A contract can't be bound if any of these essentials is missing. It can be either in written or in oral form. However, oral contract will be more difficult to prove its existence in the future if go to court as compared to written contract.

Contract is bound for valuable benefit, which is called consideration. Consideration is the essential that incurred in the following cases, which...

Bibliography: Carter, J.W. & John W. 1991, Contract Law in Australia, 2nd edn, Butterworth, Australia, p.307 & p.372
Cheshire, G.C
Starke, J.G., Seddon, N.C. & Ellinghaus, M.P. 1992, Cheshire & Fifoot 's law of contract, 6th edn, Australia, Perth, p.244
Hickling, 'Law 209 Contract Law with Hickling '
http://faculty.law.ubc.ca/cans/200level/contracts/Contracts%20Spring98%20Hickling.doc (18 Sept. 2005)
Parker
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