Acceptance and consideration


DOCTRINE OF PROMISSORY OR EQUITABLE ESTOPPEL



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DOCTRINE OF PROMISSORY OR EQUITABLE ESTOPPEL
This doctrine was developed by equity to mitigate the harshness of the common law rule of consideration. It is an equitable intervention which modifies the rule of consideration.
The Doctrine was explained by Lord Denning in Combe v. Combe. It is to the effect that where parties have a legal relationship and one of them makes anew promise or representation intended to affect their legal relations and to be relied upon by the other, once the other has relied upon it and changed his legal position, the other party cannot be heard to say that their legal relationship was different. The party is estopped from denying its promise.
For the doctrine of estoppel to apply the following conditions are necessary. A legal relationship between the parties. Anew promise or representation in intended to be relied upon. Reliance upon the representation. Change in legal position as a result of the reliance. It would be unfair not to estop the maker of the representation.
The Doctrine of Promissory Estoppel is often referred to as “The Rule in the
High Trees Case
In Central London Property Trust v. High Trees House Ltd, the plaintiff owned a block of flats which it leased to the defendant for 99 years at 2500 pounds per year. After the outbreak of the 2
nd world war, it became clear that the defendant was not in a position to pay the agreed rent as most of the flats were
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unoccupied. The plaintiff promised to accept half of the rent as long as the war continued. By the end of 1945, all the flats were occupied. The plaintiff sued for the defendant to be compelled to pay. The full rent. The arrears.
The defendant argued that it was inequitable (unfair) for the plaintiff to claim the arrears. It was held that whereas it was fair for the defendant to pay the full rent, it was unfair to claim the arrears as the plaintiff had made a promise which the defendant had reliede upon and changed its legal position.
The plaintiff was estopped from insisting on the arrears. The doctrine of equitable estoppel applies in East Africa.
In Century Automobile v. Hutchings Biemer Ltd, the defendant took a lease of the plaintiff’s premises which was terminable by a 3 month notice of either party. The defendant intended to make alterations to the building but feared doing so only for the lease to be terminated. The plaintiff promised not to terminate the lease in 4 years time.
As a consequence, the defendant spent 800 pounds on the alterations but months later the defendant received the plaintiff’s notice of termination but refused to honour it and was sued.
The defendant pleaded estoppel. The plaintiff was estopped from evicting the defendant as it had made a promise which the defendant had relied upon and changed its legal position.
A similar holding was made in Commissioner of Lands v. Hussein.

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