If English law decided to abolish the doctrine of consideration it would rely on alternative methods such as promissory estoppel to replace the role of consideration in filtering out non-contractual agreements. The outcome of using alternative methods rather than consideration would impact on case precedency and it would change the formation of contracts as consideration is a key element in forming a contract. However since there has been legitimacy and applicability issues raised regarding the doctrine of consideration, it seems necessary to look into the possible abolishment of consideration and finding an alternative method to fill its role in contract law. This alternative method could be promissory estoppel if it wasn’t limited to a defence
Estoppel is a doctrine that can on occasion disable a party on going back on their promise when consideration isn’t present. It is currently used as a defensive mechanism in which a contract can be modified but not formed upon. Therefore usually consideration is used during the formation of contract but if consideration happens to not be present then estoppel can be used to enforce the promise even if consideration isn’t present. Promissory estoppel was first established in Central London Property Trust v High Trees House [1947] KB 130 in which Denning J used estoppel to prevent Central London Property Trust on going back on their promise to accept a lower rent. "In my opinion, the time has now come for the validity of such a promise to be recognized. The logical consequence, no doubt is that a promise to accept a smaller sum in discharge of a larger sum, if acted upon, is binding notwithstanding the absence of consideration", Denning J had generated an approach to allow a contract to exist even if consideration is not present, therefore this begs the question of whether we need
Although this would be a drastic measure since the case law in this matter is fairly unanimous in only using estoppel as a shield. Take the Baird Textile Holdings Ltd v Marks & Spencer Plc [2001] in which Judge LJ stated, “Estoppel is not capable of creating its own cause of action”. He also held that estoppel would necessitate further expansion to be used as an action. Therefore the need for further development on the laws of estoppel but it is not necessarily a bad alternative as seen in the Australian case of Waltons Stores (Interstate) Ltd v Maher [1988] 164 CLR in which the High Court of Australia allowed estoppel to be used as a sword, this meaning that estoppel can play an important role in the formation of contracts. Albeit that promissory estoppel could work as an alternative to consideration, the question is whether it would be a better alternative. Negatives for promissory estoppel (use the baird
In the 1992 Syracuse Law Review, Robert L. Sweeny explicates some of the various terms that are necessary for real estate contracts to include. The author writes that it is essential in many real estate contracts for the property to either have no impediments or to provide insurance on these impediments in the form of an insurable title. The writer cites Stambovsky v. Ackley as a case that lacked this type of contact, which resulted in
-Court must be convinced that failure to comply with an agreement will lead to one of the parties to suffer prejudice. Court will protect innocent party, will provide remedy
The article " Promissory estoppel" helped me understand promissory estoppel because in the article it talks about what promissory estoppel is and they also broke down promissory estoppel for a better understanding. The article states that the elements that a promissory estoppel needs to make a claim is "a promisor, a promisee, and a detriment that the promisee has suffered" (Investopedia,
In the 19th century, promissory estoppel was first introduced in Hughes v Metropolitan Railway Co , where Lord Cairns ruled that parties who have entered into fixed terms and then afterwards, by their own act or will, enter negotiations which influence the other party to assume that the stringent rights that were originally imposed will not be enforced or will be deferred, should be unable to reverse from this if it is inequitable for them to do so. This doctrine was resurrected by Lord Denning in Central London Property Ltd v High Trees House Ltd , where he expanded on the doctrine of promissory estoppel and ruled that where there is a promise intended to form legal relations and the promisor knew it would be acted upon and it was acted upon by the promisee then the promise made would be binding even with a lack of consideration.
Gillett v. Holt The doctrine of proprietary estoppel is an equitable intervention in cases where the enforcement of legal rights is considered by the courts to be unconscionably unfair. The essence of the doctrine arises, as defined by Snell: '[when] one (A) is encouraged to act to his detriment by the representations or encouragement of another (O) so that it would be unconscionable for O to insist on his strict legal rights.' (McGhee, 2000, p.637) In the absence of a written agreement, estoppel acts as an evidentiary tool with which the courts can help ensure fair interaction in property dealings. Proprietary estoppel is a method by which informal arrangements are recognized as being capable of creating proprietary interests.
Having evaluated the current state of English contract law, mainly made up of piecemeal solutions, it can be seen that despite being satisfactory and doing its job, there still remain gaps within the law of contract where unfairness is not dealt with. Moreover, due to the ad hoc nature of those piecemeal solutions, the latter have often produced inconsistent justice and have manifested cases of unfairness. Hence, “a relatively small number of respected Justices have endeavored to draw attention to the fact that the application of a general principle might be useful and even necessary in English law.”
Lord Denning described estoppel succinctly as ‘a principle of justice and equity. It comes to this: when a man, by his words or conduct, has led another to believe in a particular state of affairs, he will not be allowed to go back on it when it would be unjust or inequitable for him to do so’ . Proprietary estoppel in turn is an informal method by which proprietary rights can arise. It can provide a defence to an action by a landowner who seeks to enforce his strict rights against someone who has been informally promised some right or liberty over the land. In turn it can be used as a defence or a cause of action. In order to show how the two doctrines are quite similar, a description of the elements of proprie...
Based on common law and precedent, the English law of contract has been formulated and developed over a number of years with it’s primary purpose to provide a regulated framework within which individuals can contract freely. In order to ensure a contract is enforceable there are certain elements which must be satisfied, one of which is the doctrine of consideration. Lord Denning famously professed; “the doctrine of consideration is too firmly fixed to be overthrown by a side wind” . This is a crucial indication that consideration has long been regarded as the cardinal ‘badge of enforceability’ in the formulation and variation of contracts in English common law.
HILLIARD, J. And O’SULLIVAN, J. (2012) The Law of Contract [Online] 5th Ed. Oxford: Oxford University Press. Available from - http://books.google.co.uk/ [Accessed: 2nd January 2014]
Both the common law and the statutory law have recognized the weaker position of consumers. It is well established an exclusion clause will be valid and enforceable only if it is incorporated in the contract, use clear wordings and does not contravene statutory limits. In order to limit the unfairness resulting from exclusion clauses, the courts have developed certain principles such as the doctrine of non est factum in signature cases, ‘red ink-red hand’ principle in relation to ‘onerous or unusual’ terms, contra proferentem rule when interpreting ambiguous exclusion clauses and ‘fundamental breach’ principle.
One of the last remaining strongholds of classical contract law is the notion that contracts require offer and acceptance therefore, in order for a contract to become binding, offer, acceptance, consideration and intention to create legal relations must exist. However contracts are formed in different ways for each different circumstance. (Shawn Bayern, Offer and Acceptance in Modern Contract Law: A Needles Concept, 103 Cal. L. Rev. 67, 102 (2015)
The old common law had a doctrine of absolute contract under which contractual obligations were binding no matter what might occur (Paradine v Jane, 1647). In order to ease the hardship which this rule caused in cases where the contract could not be properly fulfilled through no fault of either party but due to occurrence of unforeseen events, the doctrine of frustration was developed.
This judgment given set criterion which is still been used in the modern court system and due to this case it was developed that an offer of contract can be unilateral and doesn’t have to be made to a specific party only. Also it was developed to that the acceptance of an offer does not require a notification and that once the concerned party purchases the product the contract is active then and there itself. And it was also established that purchase of an item is a fine example of consideration and therefore makes it a valid contract. (Smith, 2000).
When analyzed in depth it is evident that Section 24 (4) of the Arbitration Act paves the way to apply principles ...
In English Law consideration is one of the three main areas of an enforceable contract. It may be defined as an act, forbearance or promise made by a single party that constitutes the price for which the promise of another, is bought. In simple terms, the basic understanding of consideration may be seen as a ‘give and take’ tactic between two parties.