OCR A2 Law - The Law of Contract - Consideration (7)

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  • Created by: Majid
  • Created on: 26-04-13 15:10

Consideration (7)

Equity (cont) ... creditor will be estopped from suing the remaining balance if it is inequitable.

Equity is discretionary and certain rules apply. It can only be "used a shield and not a sword" and only used as a defence. Eqiuty can only be used with "clean hands". This can be seen in "D&C Builders v Rees" as Rees was unsuccessful in raising promissory estoppel as a defence because he took advantage of the builders financial situation.

P/P of a debt via a 3rd party: If a debt is paid by 3rd party then the creditor cannot sue the debtor as it acts as a fraud on 3rd party.

Case: "Hirachand v Punamchand v Temple". In this case Temple owed money to a money lenderer but he couldn't afford to pay it. Temple's father went to the money lender who agreed to accept p/p in full settlement. He then sued for the remaining balance. It was held that he couldn't sue Temple because it's be a fraud on his father.

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