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“While the so-called doctrine of Promissory estoppel was developed to alleviate the unfair effect of
the requirement for consideration, the doctrine now appears well placed as an alternative to
consideration”.

Discuss

Write a story board for the answer.

1. Identify the key words in the quote.

i. Alleviate
ii. Unfair effect of the requirements of DOC
iii. The doctrine now appears
iv. Well placed alternative to DOC

2. Identify the unfair effect of DOC

3. Which doctrine now appears to be well placed towards DOC

4. Is doct. of PE a suitable replacement?

5. What is the purpose of DOC and PE?

6. Examine the reqs for PE and identify if it can fill in the gaps left by DOC?

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1. Prior to discussing the correctness of this assertion, the writer seeks to examine whether the

doctrine of consideration has brought about some harsh consequences. Thereafter, one shall

examine if Estoppel can replace Consideration.

2. What is the possible harshness caused by the doctrine of consideration?

a) Many academics such as Prof Dawson and Dr Ewan McKendrick are of the opinion that if

consideration is based on the notion of reciprocity of promises, consideration to a large

extent, is used as evidence of proving the existence of a bargain.

b) What is referred to as reciprocity of promises?

c) The traditional definition in Currie v Misa requires for there to be exchange of benefit and

detriment. In the absence of such exchanges, it is difficult to assert the existance of

consideration.

d) Prof Atiyah criticizes the notion of reciprocity of promise by reference to Currie v Misa.

e) Prof Atiyah says this of Chappel v Nestle:

It is ridiculous to assert that the sending or receipt of the wrappers involve a detriment to the

sender or a benefit to the recipient.

f) According to him, finding the idea of consideration based on reciprocity as such is absurd.

Instead, he opines that the wrappers was the motive which inspired the promise and the

courts would have enforced the promise despite the lack of benefit to the promisor. This is

because the courts have found a reason for the enforcement of the promise.

g) Prof Treitel in contrast maintains the idea of reciprocity. According to Treitel, Atiyah has failed

to realize that English Law does not take into account question of adequacy of bargain. English

law is in support of the idea that consideration need only be sufficient and not adequate.

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h) The writer submits that even if Treitel is correct, there seems to be inconsistency within the

courts because the judges themselves are divided in finding for sufficient consideration. Ex

see the case of Bret v JS, White v Bluett, Ward v Byham.

i) Recently in Williams v Roffey Bros, the courts have found justifications behind the above

cases. They opined that, “consideration must still there be, but finding of it must be done by

giving effect to the intention of the contracting parties”.

In addition,it was further stated a promise can become enforceable if the promise can confer

practical benefit in the absence of duress.

j) Even if factual benefit is a solution it posses certain issues in law:

It goes against the very purpose of contract law, ie the purpose of contract law is to uphold

promises and if you don’t perform the obligations, it should only result in breach.

It is unfair for someone to rely on his own breach to establish consideration and claim extra

payments.

Even if there was an avoidance of the penalty clause, the promise cannot claim he has

conferred practical benefits; for the promisor could have claimed damages.

Finding of practical benefit in Roffey’s Case is not precise. Does every avoidance of hassle,

generally constitutes practical benefit?

3. It is submitted that the above are possible unfair effect of the doctrine of consideration. We

shall now proceed to consider the if estoppel is a well-placed alternative to doctrine of

consideration?

4. Explain the doctrine of promissory estoppel by reference to:

Central London Property Trusts v High Trees House and Hughes v Metropolitan Rly Co.

5. Provide the definition of estoppel.

6. From the definition, submit that the promise must prove 5 requirements.

The existence of a clear and unequivocal promise

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Variation of the existing contractual relationship as a result of the promise.

The promise must come to equity with clean hands.

The promise can only use the doctrine as a shield

The promise must prove reliance.

7. From the above requirements submit that some of the requirements have casted doubt as to

whether estoppel can be an alternative to consideration.

8. Explain the principle in Combe v Combe. Ask why does English Law limit the use of estoppel

as above?

Ex:

Assuming that A promised to pay you 1000. Thereafter you act on the promise and spent

further 400 of your money which you would not have spent otherwise. If consideration was

furnished by you, than a claim for 1000 can be made.

If on the other hand you did not furnish consideration, than by reliance of estoppel, the

promise has only suffered a detrimental loss. In this instance he can only claim for 400. Hence

the relationship between consideration and estoppel. Consideration allows you to claim for

expectation losses but estoppel only for reliance losses. Note the difference in approach in

Australia.

9. From the abovesaid illustration, it is clear that so long as estoppel is restricted to the

protection of reliance interest, it cannot fulfill the role of consideration ie to protect

expectation losses.

10. For these reasons, cases like Baird Textiles v Marks & Spencer have confirmed the proposition

that estoppel can only be used as a shield and not as a sword.

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11. As stated earlier in Australia, the courts still allow estoppel to claim expectation losses. In UK

however, the approach is not adopted because, English Courts recognize different types of

estoppel such as proprietary estoppel which can be used as a sword!

12. In relation to proof of reliance there are authorities that suggest that detrimental reliance is

essential as per Goldsworthy v Brickell. If this view is correct than note that the requirements

forms part of consideration of it satisfies the definition of consideration within Currie v Misa.

Why need estoppel when you have proven consideration?

13. In contrast if one adopts the views in Ajayi v Briscoe, then it is submitted that estoppel can

replace consideration because by reference to this principle, there is no need to prove

detrimental reliance except acting on the promise itself This divided opinion does not place

estoppel as a replacement to estoppel.

14. It has been stated in CLPT’ Case that estoppel is only extinctive in its nature. In other words

the promisor is not allowed to enforce his common law rights as per Foakes v Beer. If the

English courts maintain this approach estoppel can replace consideration subject to the

above.

15. However the modern school of thought seems to suggest that estoppel is suspensory and in

those instances the promisor should be allowed to enforce his common law rights because:

It will augur well with the common law principle of Foakes v Beer, ie payment of lesser

sum cannot be sufficient consideration to discharge the liability of a larger sum, subject

to Re Selectmove.

The continued existence of common law and equity and desirable. One should not

make the other redundant.

Estoppel should be viewed as a commercial tool of variance and the courts should

allow the parties to renegotiate their contractual obligations.

16. If estoppel is given a broader scope of being suspensory tha it cannot replace the doctrine of

consideration. On the other hand if it is extinctive, it can replace the doctrine of consideration.

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