CONTRACT LAW – LECTURE 4
Is about the enforceability of all alteration promises (promises to pay more and promises to accept less) and by contrast estoppels does not apply to promises about the formation of initial contracts Ex.
If a creditor promises to accept a smaller sum in full settlement intending the debtor to rely on that promise, and the debtor does rely on it, the debtor may have a defence of promissory estoppels when sued for the balance by the creditor. The promise will in this way, be enforced despite the absence of consideration to support it Promissory estoppel is an equitable doctrine which in some instances can stop a person going back on a promise which is not supported by consideration Consideration: a contract between 2 parties gaining something form an agreement It is the price for which the promise of the other is bought. It must be something of value which is recognized by the courts Prevents one party from withdrawing a promise made to a 2nd party if the latter has reasonably relied on that promise In English law, a promise made without consideration is generally not enforceable. It is known as a bare or gratuitous promise. Thus, if a car salesman promises not to sell a car over the weekend, but does so, the promise cannot be enforced. But should the car salesman accept even one penny in consideration for the promise, the promise will be binding and enforceable in court. Estoppel is not an exception to this rule. Requirements of promissory estoppel:
A pre-existing contract or legal obligation which is then modified There must be a clear-cut promise
Change of position of the promisee as a result of the promise It must be inequitable to allow the promisor to go back on their promise In general, estoppel is 'a shield not a sword' — it cannot be used as the basis of an action on its own. It also does not extinguish rights Conditions
There must be a pre-existing contractual relationship
The promisor made a...
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