Promissory Estoppel

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  • Promissory Estoppel
    • Estoppel - a device developed by the courts to prevent a party from acting in a particular way when the other party has relied upon the facts represented to him.
      • Promissory estoppel - equitable device preventing a party from going back on a promise to a party which has relied upon said promise.
    • Central London Property Trust Ltd v High Trees House Ltd
      • High Trees leased block of flats from Trust Ltd for £2,500, reduced to £1,250 due to WW2. Plaintiff sought to reinstate rights to charge full rent and arrears from years during the war. Court held arears couldn't be claimed as original claim was to charge full rent again.
    • Limitations
      • There must have been an existing legal relationship between the parties.
        • E.g. High Trees and Trust Ltd had a relationship prior to the promise of reduced rent.
      • There must have been (detrimental) reliance on the promise.
        • High Trees relied on the plaintiff's promise.
      • The doctrine operates as a shield not a sword.
        • Promissory estoppel can only be used as a defence, not as a cause of action.
          • "you promised that you would not demand payment of..." NOT "you must not claim back the £..."
      • It must not be inequitable to allow the promisor to go back on his promise.
        • if the promise has altered party's position to their detriment it would be inequitable to allow the promisor to go back on their promise.
          • In the case of High Trees it would have been inequitable to go back on promise.
        • In some cases it is equitable for promisor to go back on their word if reasonable notice is given of intention.
        • If the promise has acted inequitably, the court will not allow them to use promissory estoppel as their defence.
          • D&C Builders Ltd v Rees
      • The doctrine merely suspends rights, it doesn't extinguish them.
        • Rights will be suspended for agreed upon time
        • Rights can be reinstated.
        • Tungsten Electric Co Ltd v Tool Metal Manufacturing Co Ltd - Tungsten sold patented alloys from Tool Metal. If they sell more than agreed they have to pay Tool Metal compensation. This got waived due to WW2. Tool Metals rights got reinstated.


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