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Promissory Estoppel - Essay Example

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Daniel Farber and John Matheson (1985) refers to is as the “invisible handshake”, or a promise made in order to further an economic activity. Through this doctrine,…
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Promissory Estoppel
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Download file to see previous pages In this view, promissory estoppel is established as a contractual obligation that will in fact harmonize the often-divergent philosophies adhered to by legal scholars. This article looks at the different circumstances when promissory estoppel is used in the English courts and tries to summarize why the doctrine is an important part of contract law. It also tries to explain why the use of promissory estoppel is being contested. This paper maintains that promissory estoppel is still important in contract law and that instead of declining, it is actually evolving.
Promissory estoppels has three distinct elements: (1) a clear and definite promise, (2) the promise induced action or forbearance, and (3) injustice can only be avoided with the enforcement of the promise (Boyer 1950: 460). The doctrine of promissory estoppels was first expounded in the case of Central London Property Trust Ltd v High Trees House (Denning 1946). In 1937, High Trees House Ltd. leased a block of flats from Central London Property Trust, with the conditions that the rent is worth £2,500 and duration is 95 years. But because London was suffering from war bombings at the time, High Trees may not be able to pay out its lease. To help the company sustain its business and since numerous flats were still unrented, the plaintiffs sent a letter to the defendant confirming the reduction of the rent to £1,250. The defendants continued to pay the reduced rent and by 1945, when all the flats have been rented out, High Trees paid only £1,250. In September 1945, the plaintiff wrote a letter to the defendant collecting the original amount of £2,500 for the entire year starting from September 29 to December 25, 1945. The defendants held that the letters passed on between the parties was evidence of modification in the original contract and that it was equally legally binding to the plaintiff company. Lord Denning ...Download file to see next pagesRead More
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