Contract Essay - Consideration and promissory estoppel
For reference, Past paper Question:
“It would be wrong to extend the doctrine of promissory estoppel, whatever its precise limits at the
present day, to the extent of abolishing in this backhanded way the doctrine of consideration’ – per
Roskill LJ in Brikom Investments v Carr (CA) [1979] QB 467, 486.
Explain and critically evaluate this statement with reference to consideration and the doctrine of
promissory estoppel.
Explain what is required to make a contractual variation binding and why consideration is generally
the stumbling block.
- ‘Consideration’ in the eyes of the law does not have its ordinary, everyday, meaning. An
often-quoted definition of consideration is that contained in Currie v Misa (1875) LR 10 Ex
153 which refers to benefit and detriment and states “A valuable consideration, in the sense
of the law, may consist either in some right, interest, profit or benefit accruing to the party or
some forbearance, detriment, loss or responsibility, given, suffered or undertaken by the
other.”. This can be interpretated as meaning what is provided by way of consideration
should either be a benefit to the person receiving it, or a detriment to the person giving it,
often both.
- As well as thinking of consideration in terms of benefit and detriment, it is also possible to
think of consideration as the price one party pays for the other party’s promise,
- Sir Frederick Pollock defined consideration as ‘an act or forbearance of one party, or the
promise thereof, is the price for which the promise of the other is bought’ (Pollock on
Contracts, 8th edn, p 175).
- This definition highlights the fact that a promise to do something may be consideration.
Explain the position at common law regarding partial performance of contractual duty owed to the
other contracting party.
- Part payment of a debt is not good consideration for a promise by the creditor to forego the
balance. There must be additional consideration. Refer to Pinnels case and Foakes v Beer.
- As seen in Pinnels case - if the creditor accepts payment of a lesser sum early, he presumably
does so because he regards it as being more beneficial than receiving the full amount on the
due date
- In Re Selectmove the C of A felt constrained by precedent to extend practical benefit
consideration (Williams v Roffey) to part payment of a debt. It said there would almost
invariably be a practical benefit in accepting part payment rather than risk getting no money
at all. That being the case it would virtually get rid of Foakes v Beer. Foakes v Beer was
decided by HL. So the C of A said the matter would have to be decided by the Supreme Court
or Parliament. The Supreme Court in Rock Advertising v MWB Business Exchange did not
have to consider the issue.
For reference, Past paper Question:
“It would be wrong to extend the doctrine of promissory estoppel, whatever its precise limits at the
present day, to the extent of abolishing in this backhanded way the doctrine of consideration’ – per
Roskill LJ in Brikom Investments v Carr (CA) [1979] QB 467, 486.
Explain and critically evaluate this statement with reference to consideration and the doctrine of
promissory estoppel.
Explain what is required to make a contractual variation binding and why consideration is generally
the stumbling block.
- ‘Consideration’ in the eyes of the law does not have its ordinary, everyday, meaning. An
often-quoted definition of consideration is that contained in Currie v Misa (1875) LR 10 Ex
153 which refers to benefit and detriment and states “A valuable consideration, in the sense
of the law, may consist either in some right, interest, profit or benefit accruing to the party or
some forbearance, detriment, loss or responsibility, given, suffered or undertaken by the
other.”. This can be interpretated as meaning what is provided by way of consideration
should either be a benefit to the person receiving it, or a detriment to the person giving it,
often both.
- As well as thinking of consideration in terms of benefit and detriment, it is also possible to
think of consideration as the price one party pays for the other party’s promise,
- Sir Frederick Pollock defined consideration as ‘an act or forbearance of one party, or the
promise thereof, is the price for which the promise of the other is bought’ (Pollock on
Contracts, 8th edn, p 175).
- This definition highlights the fact that a promise to do something may be consideration.
Explain the position at common law regarding partial performance of contractual duty owed to the
other contracting party.
- Part payment of a debt is not good consideration for a promise by the creditor to forego the
balance. There must be additional consideration. Refer to Pinnels case and Foakes v Beer.
- As seen in Pinnels case - if the creditor accepts payment of a lesser sum early, he presumably
does so because he regards it as being more beneficial than receiving the full amount on the
due date
- In Re Selectmove the C of A felt constrained by precedent to extend practical benefit
consideration (Williams v Roffey) to part payment of a debt. It said there would almost
invariably be a practical benefit in accepting part payment rather than risk getting no money
at all. That being the case it would virtually get rid of Foakes v Beer. Foakes v Beer was
decided by HL. So the C of A said the matter would have to be decided by the Supreme Court
or Parliament. The Supreme Court in Rock Advertising v MWB Business Exchange did not
have to consider the issue.
