Variation of Contract - Essay Example

Law of Contract Introduction The key intention of English law which s that not all promise is de jure enforceable for which the courts actually need to create mechanisms which would help in solving the problems. This would help the courts to differentiate between enforceable and non-enforceable responsibilities. This has to be enforced by courts and the respective tribunals in employment challenges as well as by the courts in the commercial background also. The common law is actually subjugated by the premise of agreement which is supposed to be the prime clarification of contractual liability, albeit it is added on with the purpose to create legal dealings. This is the command of the doctrine of consideration. Thus courts sometimes apparently are prepared to take up consideration instead of questioning its needs.1 Exchange thus makes up the terra cognita of contractual responsibilities. Presented promises are often passed on to the private sphere of influence2. Their breach is made good with only a moral sanction. But in the laws of employment immediately post decision of Taylor v Secretary of State for Scotland,3 this conventional dissimilarity is under stress.4 With regard to Re Selectmove [1995] 1 WLR 474 the case was for payment of a debt which the company Selectmove owed to the crown. In order to escape payment of the debt the company was wound up. The question to be discussed is whether the debt was a disputed one or not For this the law of estoppel has to be understood. Law of Estoppel In reality the doctrine of promissory estoppel states that: "Where by his words or conduct one party to a transaction makes to the other a clear and unequivocal promise or assurance which is intended to affect the legal relations between them (whether contractual or otherwise), or was reasonably understood by the other party to have that effect, and, before it is withdrawn, the other party acts upon it, altering his or her position so that it would be inequitable to permit the first party to withdraw the promise, the party making the promise or assurance will not be permitted to act inconsistently with it" (Snell's Equity, 2004). Many factors on the part of the offeree may raise an estoppel5. But there will be no estoppel if one party in a contract calls for the other to depart its terms. Meanwhile the other party will most likely continue with the performance of the contract.When there is a counter offer then silence on the part of the creative offeror will not normally form an acceptance. But it will be considered as an acceptance in case of an offer without time limit. It may be construed as acceptance if the original offeror had objected to some of the extra terms which the counter offer may contain. In cases of ambiguous offer where the offeree communicates to the offeror about his understanding of the offer then such a communication will almost certainly result in a counter-offer. Under such circumstances silence will make up acceptance on the part of the offeror6. Some of the recent cases manifest the dampening, or elimination, of a quiet a lot of the uncertain philosophies or maxims which have conventionally confined the functioning of the doctrines of estoppel. This has actually limited an open challenge to the importance of the agreement meant to produce legal relations and confirmed by circumstance as the means of imposing promissory responsibilities. In Walton's Stores (Interstate) Ltd v Maher,7 the majority8 in the High Court agreed that Maher, a constructor, who was negotiating a contract with the appellant, Walton's. Under the agreement it was decided that Maher would destroy buildings on the ground which he possessed and then build and rent to Walton's a building to its stipulation. This brought reliance on the doctrine of promissory estoppel when Maher destroyed the old buildings accepting that a contract between the parties would be arrived at.9 The majority were not stressed by the alleged convention that such rules of evidence do not find a reason for action, or by the obligation of a pre-existent legal relationship to reach such a conclusion. Brennan J attempted to style the doctrine in a manner which would meet this issue. He stressed that the part played by estoppel was to defend a frustrated promisee from the hurt he would undergo in the occasion of the promisor unreasonably rejecting to carry out his promise; it was not to meet the promisee's anticipations (Halson R.2005). Substantial Developments One of the most important exploitations in the law of contracts in the past 50 years is the conception, or re-creation, of a principle of promissory estoppel. Close consideration to the realities of the cases that gave advance to this growth in England10 discloses that the doctrine affords restricted legal impression to promises made by one party to another not to persist on his or her austere contractual rights under that contract; For instance the landlord's promise to agree to half rent in High Trees11. In Williams v Roffey Bros & Nicholls (Contractors) Ltd,12 the English Court of Appeal followed a principle of consideration which stressed the fact of gain or hurt at the time of operation. This approach has been acknowledged and adopted lately on two junctures by the New Zealand Court of Appeal.13 An associated growth is the outgrowth of a doctrine of economic force which attempts to check the illegal practice of economic power, for instance, the danger of a shipyard to break a contract with a client by denying driving home a ship unless owing payments were augmented (North Ocean Shipping v Hyundai Construction Co [1979] QB 705). Variation of Contract The effect of Stilk v Myrick has demonstrated to be debatable in the common law of contract. The code that a pre-existing contractual obligation is no Condition for a new agreement has been characterised in Williams v Roffey Bros. Ltd.14 Although it is clear that the case of Williams is not proposed to override the obligation in Stilk v Myrick with regard to there being consideration15 settlement of these cases is not simple 16 A likely clarification lies in the commercial justification for maintaining relationships. The point in Williams was with regard to the cost of employing a new contractor intended that the economically intellectual alternative was to agree more to hold back the existing contractor operating. The logic explains the renewed conception of consideration in the contemporary employment law in which agreements are sometimes sorted as relative or long term contracts. To these only extraordinary principles apply and not exchange of contracts which are theme of the traditional rules. In the case of Williams v Roffey the financial difficulties of the plaintiff made the defendant to agree to pay him more. But after some work was completed the plaintiff abandoned the work and it was held that the plaintiff had to enforce the promise since the benefits had already been transferred to the defendant. In the context of the alteration promises the effect rises in terms of abolishment of the doctrine of consideration. Apart from this there are three principal issues when this doctrine is applied. In the above case the element of the promise does not arise due to economic force or fraud on the part of the other party. The question now arises as to whether the promise is binding. The law states that a contract which has a base of duress or fraud is capable of being enforced by the party who exerts improper force. In general neither duress nor fraud can be a good defence unless of course if the case has been genuinely annulled. So also in case of restitution action there can be no claim till the contract is rescinded. This will provide a proof of affirmation to the contract and it becomes a valid defence for claim (North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd (The Atlantic Baron) [1979] 1 QB 705 (see Brian Coote, [1980] CLJ 40). In the case of RE SELECTMOVE LTD [1995] 2 All ER 531 there are two elements to be considered. They are: 1. Promise to pay off the existing indebtedness by instalments starting from 1 February 1992. 2. Once the PAYE and NIC were due in the future they will have to be paid off immediately. Thus it can be inferred that continuation of the trade was implicit. But with regard to the second element of the case it was only a promise to pay that amount which was bound to be paid. Thus it can be concluded that if the first element is not a good consideration then automatically the same thing can be said of the second element. Therefore the judges of this case held that the principle of Foakes v Beer (1884) 9 App Cas 605, [1881-5] All ER Rep 106 could also be applied to this case. Thus The House of Lords stated that the agreement was nudum pactum, meaning that it was without consideration. This will not preclude, the creditor, to keep on with the enforcement of the interest payment once the whole debt and its costs have been paid for. Conclusion Actually the application of Williams and Roffey Brothers v. Nicholls [1991] 1 Q.B. 1 to cases concerning debt is prohibited by the decreeing ruling in Re Selectmove [1995] 1 W.L.R. 474. Thus from the case it was concluded that if an already existing debt has to be written off then a fresh consideration has to be provided for. (Foakes v. Beer [1883- 84] L.R. 9 App. Cas. 605). The promise to pay off an amount which is already owed by the debtor cannot be a good consideration (Foakes v. Beer). Thus the case of Williams v. Roffey principle is not applicable if the on hand duty is to pay money but relatively only where the offered responsibility is to provide goods or services Word Count: 1653 Reference 1. Halson, Roger, (2005) "Negotiation, modification and the structure of contract textbooks" Canterbury Law Review 163. 2. Snell's Equity (31st Edition) 2004 Sweet & Maxwell 10-08 Read More