Site Loader
Rock Street, San Francisco

At
common law, we find ourselves with several ways to enforce a contract.
Generally speaking, there are three different types of contracts that the
common law has recognized. There are contracts by seal, contract by
consideration, and finally, there is the contract by reliance, which is protected
by estoppel. But assuming the common law wants to get rid of the doctrine of
consideration, I believe the doctrine of promissory estoppel, although
different in nature, is the best suited to step in and replace the various
roles the doctrine of consideration currently plays in the common law of
contracts.

 

Despite
the controversy and challenges that the doctrine of consideration faces, it is commonly
known as being at the core of the common law rules regarding the enforcement of
contracts. Over the years, the idea of what consideration is has become more
abstract but the basic idea revolving the concept of consideration is that it
conveys a “bought” promise. This means that there must be a reciprocal exchange
of something of value in exchange for the promise of the opposing party. For
years, the courts have questioned the legitimacy and significance of the
doctrine of consideration, and sometimes will avoid strictly applying this
doctrine by way of other doctrinal tools.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

 

Although it is traditionally used as a defence when a person is
being sued, the doctrine of promissory
estoppel could act as a replacement for the doctrine of consideration, as a way to enforce promises. In the absence
of consideration, courts will sometimes enforce reliance in order to protect
reliance1.
This is done by using estoppel, which is when. The leading decision in
the development of the legal rules protecting reliance is Central London Property Trust Ltd v. High Trees House Ltd (1997). This case saw develop the “fusion” of
law and equity, and what Lord Denning did in this decision. The court found that
when a promise is intended to be binding and intended to be acted on, and was
in fact acted on, there is actual reliance. The courts won’t allow a party who
made a promise to act contrary to it and pretend as if the promise was never
actually made. As a result, the landlord (plaintiff) couldn’t go back on his
word and promissory estoppel was used to show that there were in fact legal
relations. The High Trees
principle was later seen in Combe v.
Combe (1951), but in this case,
the plaintiff is suing for breach of promise based on reliance. The wife,
as plaintiff, wants to use the doctrine of promissory estoppel to enforce her
husband’s promise based on the fact that she relied on it, but as Lord Denning
stated, estoppel is a “shield”, and not a “sword”.

 

The “sword and shield” maxim is truly the biggest impediment in
saying that promissory estoppel can act as an alternative to the doctrine of
consideration. From the cases stated above, we understand that promissory
estoppel can only be used as a defence. Saying otherwise would
render the doctrine of consideration useless. But if the common law were to completely
get rid of the doctrine of consideration, I believe it would have to adopt the
same method used in Walton Stores
(Interstate) Ltd. v. Maher (1998), where the High Court of Australia said
that promissory estoppel could be used to create rights. In this case, there is
a dispute between a landlord and tenant, where a contract for a lease of land negotiated
between the parties, required the landlord to tear down his building in order
to put up a new one. The only thing that was left was for the contract to be
signed by the tenant, but once the building was torn down, the tenants decided
to opt out and renege on their agreement. So the question becomes, can the
landlord sue the tenant without an “underlying contract”?  For the first time, they
decided to use the doctrine of promissory estoppel as a “sword”, and it was for
the destruction of the building in reliance to the defendant’s promises. This
suggests that they are trying to turn reliance into a cause of action and the
landlord in this case wins on the basis of the doctrine of promissory estoppel.

 

Ultimately, it is very hard to picture how the common law can just
get rid of such a critical tool in the creation of contracts, but the goal of
the courts should always be to avoid injustice. Obviously the doctrine of
consideration and promissory estoppel play different roles in the common law of
contract, but promissory estoppel can clearly enforce contractual rights to a
certain extent, so long as it can be shown that not enforcing this right would
be “unconscionable” according to Walton.
These two doctrines are
still different in many ways, but in the absence of the doctrine of
consideration I believe that with time the common law will have to expand the
scope of promissory estoppel or else it will be lost.

1 Swan, A., Bala, C.N., Adamski, J., Contracts : Cases, Notes &
Materials, 9th edition, 2015 page 394.

2 Id. pg. 312

3 Id, pg.404

4 Id, pg.400

5 Id, pg.417

6 Id, pg.418

7 Id.

Post Author: admin

x

Hi!
I'm Jeremy!

Would you like to get a custom essay? How about receiving a customized one?

Check it out