Promissory Estoppel 2- Limitations Promissory Estoppel- The principle Lord Denning - Central London Property Trust Ltd v High Trees House Ltd [1947]- 'A promise intended to be binding, intended to be acted on, and in fact acted on, is binding so far as its terms properly apply' The plaintiffs were bound by their promise to accept half the rent for the war years and they will not be allowed to go back on that promise. Limitations Five limitations: • There must be an existing legal relationship. • The doctrine can only be used as a 'shield' and not as a 'sword'. • There must have been reliance on the promise. • It must not be inequitable to enforce the promise. • The doctrine only suspends rights and original terms can be revived. Existing Legal Relationship > The doctrine cannot exist in a vacuum. There has to be an existing legal relationship which is being varied by the doctrine. High Trees Case- variation of existing contractual obligations between landlord and tenant. Combe v Combe [1951] >'Shield' and not 'Sword' The doctrine of promissory estoppel cannot form the basis of a cause of action. It would generally only be available to be used as a defence. This is correlated to the fact that the doctrine is used in modifying existing relationships and not in the creation of new relationships. Combe v Combe Note: this does not mean the doctrine can only be used by a defendant and never by a claimant. Reliance on the promise The party seeking to rely on the doctrine must have taken some action on the promise. This translates to actually doing something based on the reliance upon the promise. That party must have acted on the belief induced by the other party. Example- paying the lower rent as was done by the defendants in High Trees case. Must not be inequitable It must be equitable to enforce the promise. >It must be inequitable ('unfair') to allow the promisor to go back on the promise. D & C Builders v Rees [1966] The Post Chaser [1981]
Doctrine is only suspensory The doctrine only suspends rights- Hughes v Metropolitan Railway ; High Trees case. A party can revert to original terms by giving notice - Tool Metal Manufacturing Co v Tungsten Electric Co [1955]; High Trees Case. But how would this apply to a single debt, as opposed to a continuous obligation such as rent or other instalment payments ?- D & C Builders v Rees; Collier v P & MJ Wright (Holdings) Ltd [2007]. Doctrine is only suspensory contd. Clearly, the doctrine will be suspensory in nature in a contract of continuing obligation. >However, it could also apply to extinguish rights in a one-off contract. Therefore, it depends on the nature of the promise and the type of contract. It might not then be right to conclude that the doctrine is only suspensory. Exception to the doctrine of consideration? It can be argued that the doctrine of promissory