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Estoppel

By Edited May 26, 2014 0 0

Promissory estoppel is a device
Distinct from the other estoppels such as property estoppel.

It is usually covered alongside consideration and contract creation, but can be dealth with separately like now.

It is generally used as a shield, to hold another party to a promise that if broken would be unconscionable.

What are the elements that must be proven?
(i) A Clear Promise; usually not amounting to a contract due to an utter absence of consideration

(ii) Reliance (to the detriment usually but not necessary) OR change of position
As in High Trees, the reduction of rent was on the face of it a benefit conferred, instead of perhaps a detriment.
It would be more convincing however if there was clear reliance of said promise to eventual detriment

(iii) Unconscionability; if it inequitable for A(being the promising party) to resile (meaning withdrawing from the promise), (due to lack of reasonable notice or etc...)

Effect: To allow reliant party to resume original position as if the contract had not been made.

Its active powers are suspensory not extinctive and estoppel ceases when the conditions to which the representation applied came to an end.
In essence it is: Prospectively suspensory, retrospectively extinctive
In the case of Central London Property Trust v High Trees House Ltd, the plaintiff would resume/revert to full rent upon giving reasonable notice to the promisees but was not however entitled to rent waived up to that point.

In general, Promissory Estoppel is meant to act as a Shield: Promissory estoppel cannot create a cause of action, is defensive

However in the australian case it was used as a Sword: that is, that of Walton Stores v Maher
In this case, a nasty trick was played against the owners of the land, and the courts found it within their power to set it right.

Most courts around the world are now more or less empowered to overrule themselves allowing them to, if ever necessary to consider Promissory estoppel as a cause of action so as to reverse unjust enrichment or enforce fairness and justice.

Australian elements that are to be satisfied:

a) a reasonable expectation (known/forseeable) on the part of the promisor that his promise will induce action or even forbearance by said promisee
b) an impossibility of avoiding injustice by other means.

usually, it will take a case of gross unfairness in a country without an offensive estoppel for it to evinces the possibility, at least, of the courts partaking in the more liberal Australian Position.

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