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The Doctrine of Promissory Estoppel in Contract Law

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. Some key Requirements can be identified: 1. There must be an existing legal relationship. 2. The doctrine can only be used as a 'shield' and not as a 'sword'. 3. A clear and unequivocal representation must have been made. 4. There must have been reliance on the promise. 5. It must be inequitable to go back on the promise. 6. The doctrine only suspends rights and original terms can be revived. The doctrine cannot exist in a vacuum. There has to be an existing legal relationship which has been varied and the variation is then allowed by the doctrine. High Trees Case- variation of existing contractual obligations between landlord and tenant. Combe v Combe [1951] Husband and wife were getting divorced. Husband agreed to pay wife £100 per annum between decree nisi and decree absolute. Husband never paid the money. After 7 years, wife (now ex) sued to enforce his promise. Trial judge held that promissory estoppel could apply. C of A overturned that decision, Lord Denning stated that consideration remained a cardinal necessity of the formation of a contract, but not of its modification or discharge. } The doctrine of promissory estoppel may not usually form the basis of a cause of action. >It would generally 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/formation 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. So, it can be used by a claimant as well as by a defendant, if it is applicable. An ambiguous statement cannot form the basis of an argument for promissory estoppel. A definite representation must have been made to the effect that a party will not enforce his contractual rights. WoodHouse AC Israel Cocoa SA v Nigerian Produce Marketing Co Ltd [1972] >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. Under the normal rules of contract, obligations may arise once the contract is formed and there is no need for either side to have relied on the other's promise in order to make it enforceable. But, in relation to promissory estoppel, the party trying to enforce the promise of the other party must have