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Part Performance:

Pinnels Case An agreement to pay smaller sum in lieu of a larger sum is not binding, as the agreement is without consideration. Facts The plaintiff sued the defendant for the sum of 8 10s. The defence was based on the fact that the defendant had, at the plaintiff's request, tendered 5-2s-6d before the debt was due, which the plaintiff had accepted in full satisfaction for the debt. Judgment The rule in Pinnel's Case is that:[1] payment of a lesser sum on the day in satisfaction of a greater, cannot be any satisfaction for the whole, because it appears to the Judges that by no possibility, a lesser sum can be a satisfaction to the plaintiff for a greater sum: but the gift of a horse, hawk, or robe, etc. in satisfaction is good... [as] more beneficial to the plaintiff than the money. It was followed in Foakes v BeerFoakes v Beer [1884] UKHL 1 is an English contract law case, which applied the controversial Pre-existing Duty Rule in the context of part payments of debts. It is a leading case from the House of Lords on the legal concept of consideration. It established the rule that prevents parties from discharging an obligation by part performance, affirming Pinnel's Case (1602) 5 Co Rep 117a. In that case it was said that "payment of a lesser sum on the day [i.e., on or after the due date of a money debt] cannot be any satisfaction of the whole."

Facts The appellant, Dr John Weston Foakes, owed the respondent, Julia Beer, a sum of 2,090 19s after a court judgment. Beer agreed that she would not take any action against Foakes for the amount owed if he would sign an agreement promising to pay an initial sum of 500 (48,456.04 in 2010 adjusted for inflation) and pay 150 twice yearly until the whole amount was paid back. Foakes was in financial difficulty and, with the help of his solicitor, drew up an agreement for Beer to waive any interest on the amount owed. She signed. Foakes paid back the principal but not the interest. Then Beer sued Foakes for the interest. The question was whether she was entitled to it, despite their agreement that he would not need to pay it.

Judgment Queen's Bench At trial, the court found in favour of Foakes. Watkin Williams J upheld this decision,[1] given the agreement between the two. Mathew J said, It is material to notice that by the agreement the debtor shall not bind himself to pay the creditor's nominee. That stipulation renders the document available as a security. Upon the authority of the decisions, I think there was abundant consideration for the agreement.

Court of Appeal Brett MR held, in a short judgment, that there was no consideration for the agreement. Lindley LJ and Fry LJ concurred without giving considered opinions. House of Lords The House of Lords (Earl of Selborne LC, Lord Watson and Lord Fitzgerald) upheld the ruling of the Court of Appeal in favour of Beer. They reasoned that though the agreement did not contemplate the interest owed, it could still be implied given an enforceable agreement. However, the promise to pay a debt was deemed not to be sufficient consideration as there was no additional benefit moving from Foakes to Beer that was not already owed to her. Lord Blackburn, however, while not overtly dissenting seemed to express reservations.[2] What principally weighs with me in thinking that Lord Coke [in Pinnel's case] made a mistake of fact is my conviction that all men of business, whether merchants or tradesmen, do every day recognise and act on the ground that prompt payment of a part of their demand may be more beneficial to them than it would be to insist on their rights and enforce payment of the whole. Even where the debtor is perfectly solvent, and sure to pay at last, this often is so. Where the credit of the debtor is doubtful it must be more so. I had persuaded myself that there was no such long-continued action on this dictum as to render it improper in this House to reconsider the question. I had written my reasons for so thinking; but as they were not satisfactory to the other noble and learned Lords who heard the case, I do not now repeat them nor persist in them. I assent to the judgment proposed, though it is not that which I had originally thought proper.

Exceptions:1.Part Payment by third party (Hirachand Punamchand v Temple)

Hirachand Punamchand v Temple [1911] 2 KB 330 Court of Appeal

The claimants were money lenders in India. They lent money to the defendant Lieutenant Temple who was an army officer serving in India. The claimants sought return of the money from the claimant but were unable to get any response so they contacted his father. Some correspondence went between the claimant and the father's solicitors. The claimants asked how much the father would be prepared to pay to settle the son's accounts. An amount was agreed which was a substantial, amount although not the full amount due. The claimant promised to send the promissory note relating to the son's debt to the father once they received payment. The father paid, but the claimant retained the promissory note and sued the son to enforce the balance. Held: The payment made by the father was sufficient to discharge the full balance. Where the person making payment in return for discharging the debt owed by another this will amount to good consideration as the existing duty to make payment was not owed by them but a third party.

2.Composition with the creditors (Wood v Roberts) 978 F. 2d 717 - Wood v. Roberts Hector Clyde WOOD, Plaintiff-Appellant, v. Barbara ROBERTS; Manfred Maass, Superintendent, Superintendent of OSP, et al., Defendants-Appellees. No. 91-36159. United States Court of Appeals, Ninth Circuit. Submitted Oct. 22, 1992.* Decided Oct. 28, 1992. NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel. Before SNEED, BEEZER and WIGGINS, Circuit Judges. 1 MEMORANDUM** 2 Hector Clyde Wood, an Oregon state prisoner, appeals pro se and in forma pauperis the district court's order dismissing his 42 U.S.C. 1983 civil rights action pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim for which relief can be granted.1 We have jurisdiction pursuant to 28 U.S.C. 1291. We reverse and remand. 3

We review de novo the district court's dismissal of a complaint for failure to state a claim. Love v. United States, 915 F.2d 1242, 1245 (9th Cir.1989). We take all allegations of material fact as true and construe them in the light most favorable to the nonmoving party. Id. A complaint should not be dismissed "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Id. (quotations omitted). Moreover, "[a] pro se litigant must be given leave to amend his or her complaint unless it is absolutely clear that the deficiencies of the complaint could not be cured by amendment." Noll v. Carlson, 809 F.2d 1446, 1448 (9th Cir.1987) (quotations omitted). 4 Here, Wood received the magistrate judge's findings and recommendations and therefore had notice of the deficiencies of his complaint. The district court, however, dismissed Wood's complaint without giving him leave to amend. Accordingly, we must determine whether Wood's complaint is so deficient it cannot be cured by amendment and, in the process, whether Wood can prove no set of facts that would entitle him to relief. See Love, 915 F.2d at 1245; Noll, 809 F.2d at 1448. 5 Wood alleged that he is unlawfully incarcerated because the Oregon state judicial system deprives criminal defendants of their due process rights. He alleged his conviction is therefore unconstitutional. To grant relief on these allegations, the district court would have been required to invalidate Wood's sentence. Thus, the district court correctly found that Wood's exclusive remedy for these alleged harms is a writ of habeas corpus. Preiser v. Rodriguez, 411 U.S. 475, 487-90 (1973); Young v. Kenny, 907 F.2d 874, 876 (9th Cir.1990), cert. denied, 111 S.Ct. 1090 (1991). 6 Nevertheless, the district court erred by dismissing the claims based on these allegations because to the extent Wood challenged his conviction as unconstitutional the district court could have construed the complaint as a habeas petition. See Franklin v. Oregon, 662 F.2d 1337, 1347 & n. 13 (9th Cir.1981). There is no indication in the record that the district court took this into consideration. 7 Wood also alleged that it is a custom at the prison to promote violence against sex offenders. He alleged (1) that unidentified prison guards assigned inmates classified as sex offenders to certain housing units and encouraged other, violent, inmates to harass the sex offenders; (2) that an unidentified inmate harassed and intimidated Wood and destroyed Wood's personal property after an unidentified guard told the inmate Wood was a sex offender; (3) that defendant Suwol published in the prison newsletter a request for volunteers for a survey but stated he only wanted inmates who were never convicted of a sex offense; and (4) that the watch commander summoned Wood to his office and subjected Wood to a name-calling session, further demonstrating a bias toward sex offenders on the part of senior prison officials. 8 Wood's allegation of a custom among Oregon prison officials of promoting violence against sex offenders could state a claim for relief under Monell v. New York City Dep't of Social Servs., 436 U.S. 658 (1978). Under Monell, a municipality, its agencies, or its supervisory personnel can be held liable under section 1983 if a constitutional deprivation arises pursuant to a governmental

custom even though the custom has not been formally approved through official decisionmaking channels. Id. at 690-91; Redman v. County of San Diego, 942 F.2d 1435, 1444 (9th Cir.1991) (en banc); Shaw v. California Dep't of Alcoholic Beverage Control, 788 F.2d 600, 610 (9th Cir.1986). 9 Here, Wood specifically alleged a practice among prison guards to goad violent inmates into harassing and intimidating sex offenders. Although these allegations seem conclusory, they may support a claim under Monell for a violation of Wood's due process rights caused by the failure of prison officials to protect inmates such as Wood from other inmates. See White v. Roper, 901 F.2d 1501, 1503 (9th Cir.1990). 10 Finally, the district court held that a section 1983 action cannot be maintained against John Doe defendants. In general, this is correct. See Gillespie v. Civiletti, 629 F.2d 637, 642 (9th Cir.1980). 11 However, situations arise, ..., where the identity of alleged defendants will not be known prior to the filing of a complaint. In such circumstances, the plaintiff should be given an opportunity through discovery to identify the unknown defendants, unless it is clear that discovery would not uncover the identities, or that the complaint would be dismissed on other grounds. 12 Id. Here, it is not clear that discovery would not uncover the identity of the unknown defendants. Nor is it clear that the complaint should be dismissed on other grounds. Accordingly, the district court erred by dismissing the action on this ground. See id. 13 We hold that it is possible that Wood could amend his complaint to state a claim for which relief can be granted. Therefore, because Wood is a pro se litigant, the district court erred by dismissing the complaint without first giving him an opportunity to amend. See Love, 915 F.2d at 1245; Noll, 809 F.2d at 1448. 14 REVERSED and REMANDED. * The panel unanimously finds this case suitable for decision without oral argument. Fed.R.App.P. 34(a); 9th Cir.R. 34-4 ** This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3 1 Although defendants filed their motion to dismiss pursuant to Fed.R.Civ.P. 56(b), it is apparent from the record that the dismissal was one for failure to state a claim

3. Practical Benefit/ Payment before Time/ different mode/ different place (Williams v Roffey Bros) Williams v Roffey Bros & Nicholls (Contractors) Ltd [1989] EWCA Civ 5 is a leading English contract law case, which decided that in varying a contract, the court will be quick to find consideration, if "factual benefits" are given from one to another party.

Facts Roffey Bros was contracted by Shepherds Bush Housing Association Ltd to refurbish 27 flats at Twynholm Mansions, Lillie Road, London SW6. They subcontracted carpentry to Mr Lester Williams for 20,000 payable in instalments. Some work was done and 16,200 was paid. Then Williams ran into financial difficulty because the price was too low. Roffey Bros was going to be liable under a penalty clause for late completion, so they had a meeting on 9 April 1986 and promised an extra 575 per flat for on time completion. Williams did eight flats and stopped because he had only got 1,500. New carpenters were brought in. Williams claimed. Mr Rupert Jackson QC held Williams should get the eight times 575 with a few deductions for defects and some of the 2,200 owing from the original sum. He said that they had agreed that the original price was too low, and that raising it to a reasonable level was in both sides interests. Judgment Glidewell LJ held Williams had provided good consideration even though he was merely performing a pre-existing duty. Williams got 3,500 (not full expectation damages). He said that the idea of promissory estoppel was not properly argued and not yet been fully developed.[1] The concept of economic duress provided an answer to Stilks old problem. The test for understanding whether a contract could legitimately be varied was set out as follows. if A has a contract with B for work before it is done, A has reason to believe B may not be able to complete A promises B more to finish on time A obtains in practice a benefit, or obviates a disbenefit from giving the promise there is no economic duress or fraud...

The practical benefit of timely completion, even though a pre-existing duty is performed, constitutes good consideration. On Stilk v Myrick, Glidewell LJ said, It is not in my view surprising that a principle enunciated in relation to the rigours of seafaring life during the Napoleonic wars should be subjected during the succeeding 180 years to a process of refinement and limitation in its application to the present day.

Russell LJ said the courts nowadays should be more ready to find [considerations] existence so as to reflect the intention of the parties to the contract where the bargaining powers are not unequal. He noted that Roffey Bros employee, Mr Cottrell had felt the original price to be less than reasonable, and there was a further need to replace the haphazard method of payment by a more formalised scheme of money per flat. "True it was that the plaintiff did not undertake to do any work additional to that which he had originally undertaken to do but the terms upon which he

was to carry out the work were varied and, in my judgment, that variation was supported by consideration which a pragmatic approach to the true relationship between the parties readily demonstrates. Purchas LJ concurred with Glidewell 4.Promissory Estoppel (Hughes v Metropolitan Railway Co/ High Trees) Hughes v Metropolitan Railway Co (1876-77) LR 2 App Cas 439 UKHL 1 is a House of Lords case considered unremarkable for many years until it was resurrected by Lord Denning in the case of Central London Property Trust Ltd v High Trees House Ltd in his development of the doctrine of promissory estoppel. The case was the first known instance of the concept of promissory estoppel.

Facts Thomas Hughes owned property leased to the Railway Company at 216 Euston Road. Under the lease, Hughes was entitled to compel the tenant to repair the building within six months of notice. Notice was given on October 22, 1874 from which the tenants had until April 22 to finish the repairs. On November 28, the tenant railway company sent a letter proposing to purchase the building from Hughes. Negotiations began and continued until December 30th, at which point nothing was settled. Once the six months had elapsed the landlord sued the tenant for breach of contract and tried to evict the company. Judgment Court of Common Pleas The Court of Common Pleas held in favour of the landlord, Mr Hughes. Metropolitan appealed. Lord Coleridge CJ delivered the leading judgment, with which Brett J and Lindley J concurred. Court of Appeal The Court of Appeal (1875-76) LR 1 CPD 120 reversed the decision of Court of Common Pleas. James LJ, Mellish LJ, Baggallay JA, Mellor J, and Cleasby B gave judgments. House of Lords The House of Lords affirmed the Court of Appeal. It ruled that with the initiation of the negotiations there was an implied promise by the landlord not to enforce their strict legal rights

with respect to the time limit on the repairs, and the tenant acted on this promise to their detriment. asSA Lord Cairns LC gave the lead judgment, with which Lords O'Hagan, Selborne, Blackburn and Gordon concurred. Hugh Cairns, 1st Earl Cairns gave the leading judgment. My Lords, it is upon those grounds that I am of opinion that the decision of the Court below is correct. It was not argued at your Lordships' Bar, and it could not be argued, that there was any right of a Court of Equity, or any practice of a Court of Equity, to give relief in cases of this kind, by way of mercy, or by way merely of saving property from forfeiture, but it is the first principle upon which all Courts of Equity proceed, that if parties who have entered into definite and distinct terms involving certain legal resultscertain penalties or legal forfeiture afterwards by their own act or with their own consent enter upon a course of negotiation which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced, or will be kept in suspense, or held in abeyance, the person who otherwise might have enforced those rights will not be allowed to enforce them where it would be inequitable having regard to the dealings which have thus taken place between the parties. My Lords, I repeat that I attribute to the Appellant no intention here to take advantage of, to lay a trap for, or to lull into false security those with whom he was dealing; but it appears to me that both parties by entering upon the negotiation which they entered upon, made it an inequitable thing that the exact period of six months dating from the month of October should afterwards be measured out as against the Respondents as the period during which the repairs must be execut

Part Payment by third party:Father as a third party was approved: Hirachand Punamchand v Temple; . But Spouse as a third Party was not approved: D & C Builders v Rees. Facts D & C Builders Ltd was a two man building firm run by Mr Donaldson and Mr Casey. They had done work for Mr Rees at 218 Brick Lane, London E1, coming to 732. Mr Rees had only paid 250. 482 was owing. D&C were facing bankruptcy if they were not paid. Mrs Rees phoned up to complain that the work was bad, and refused to pay more than 300. D&C reluctantly accepted and took a receipt marked in completion of account. After that, they consulted their solicitors and sued for the balance. Judgment Lord Denning MR held that the doctrine of part payment of a debt not discharging the whole has come under heavy fire but noted that estoppel, deriving from the principle laid down in Hughes v Metropolitan Railway Co. could give relief in equity. Although in his opinion part payment of debt could satisfy a whole debt, he found that Mrs Rees had effectively held the builders to ransom.

Therefore any variation of the original agreement was voidable at the instance of the debtors for duress. In point of law payment of a lesser sum, whether by cash or by cheque, is no discharge of a greater sum. This doctrine of the common law came under heavy fire. It was ridiculed by Sir George Jessel in Couldery v Bartram.[1] It was said to be mistaken by Lord Blackburn in Foakes v Beer.[2] It was condemned by the Law Revision Committee (1945 Cmd 5449), paras. 20 and 21 . But a remedy has been found. The harshness of the common law has been relieved. Equity has stretched out a merciful hand to help the debtor. The courts have invoked the broad principle stated by Lord Cairns in Hughes v Metropolitan Railway Co.[3] "It is the first principle upon which all courts of equity proceed, that if parties, who have entered into definite and distinct terms involving certain legal results, afterwards by their own act or with their own consent enter upon a course of negotiation which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced, or will be kept in suspense, or held in abeyance, the person who otherwise might have enforced those rights will not be allowed to enforce them when it would be inequitable having regard to the dealings which have taken place between the parties." It is worth noticing that the principle may be applied, not only so as to suspend strict legal rights, but also so as to preclude the enforcement of them. This principle has been applied to cases where a creditor agrees to accept a lesser sum in discharge of a greater. So much so that we can now say that, when a creditor and a debtor enter upon a course of negotiation, which leads the debtor to suppose that, on payment of the lesser sum, the creditor will not enforce payment of the balance, and on the faith thereof the debtor pays the lesser sum and the creditor accepts it as satisfaction: then the creditor will not be allowed to enforce payment of the balance when it would be inequitable to do so. This was well illustrated during the last war. Tenants went away to escape the bombs and left their houses unoccupied. The landlords accepted a reduced rent for the time they were empty. It was held that the landlords could not afterwards turn round and sue for the balance, see Central London Property Trust Ltd v High Trees House Ltd.[4] This caused at the time some eyebrows to be raised in high places. But they have been lowered since. The solution was so obviously just that no one could well gainsay it. In applying this principle, however, we must note the qualification: The creditor is only barred from his legal rights when it would be inequitable for him to insist upon them. Where there has been a true accord, under which the creditor voluntarily agrees to accept a lesser sum in satisfaction, and the debtor acts upon that accord by paying the lesser sum and the creditor accepts it, then it is inequitable for the creditor afterwards to insist on the balance. But he is not bound unless there has been truly an accord between them. In the present case, on the facts as found by the judge, it seems to me that there was no true accord. The debtor's wife held the creditor to ransom. The creditor was in need of money to meet his own commitments, and she knew it. When the creditor asked for

payment of the 480 due to him, she said to him in effect: "We cannot pay you the 480. But we will pay you 300 if you will accept it in settlement. If you do not accept it on those terms, you will get nothing. 300 is better than nothing." She had no right to say any such thing. She could properly have said: "We cannot pay you more than 300. Please accept it on account." But she had no right to insist on his taking it in settlement. When she said: "We will pay you nothing unless you accept 300 in settlement," she was putting undue pressure on the creditor. She was making a threat to break the contract (by paying nothing) and she was doing it so as to compel the creditor to do what he was unwilling to do (to accept 300 in settlement): and she succeeded. He complied with her demand. That was on recent authority a case of intimidation: see Rookes v. Barnard[5] and Stratford (JT) & Son Ltd v Lindley.[6] In these circumstances there was no true accord so as to found a defence of accord and satisfaction: see Day v McLea.[7] There is also no equity in the defendant to warrant any departure from the due course of law. No person can insist on a settlement procured by intimidation. In my opinion there is no reason in law or equity why the creditor should not enforce the full amount of the debt due to him. I would, therefore, dismiss this appeal.

Composition:Payment of a lesser sum is a good satisfaction for a larger sum where this is done in pursuance of an agreement of compromise entered into by the debtor with his creditors.

Practical Benefit:Practical Benefit/ Payment before Time/ different mode/ different place (Williams v Roffey Bros) . Promissory Estoppel:Hughes v Metropolitan Railway Co---..............................

*****Central London Property Trust Ltd. Vs. High Trees House Ltd. Facts

In 1937, High Trees House Ltd leased a block of flats in Clapham, London, for a rate 2500/year from Central London Property Trust Ltd. Due to the conditions during the beginning of World War II occupancy rates were drastically lower than normal. In January 1940, to ameliorate the situation the parties made an agreement in writing to reduce rent by half. However, neither party stipulated the period for which this reduced rental was to apply. Over the next five years, High Trees paid the reduced rate while the flats began to fill, and by 1945, the flats were back at full occupancy. Central London sued for payment of the full rental costs from June 1945 onwards (i.e. for last two quarters of 1945). Judgment Based on previous judgments such as Hughes v Metropolitan Railway Co, Denning J held that the full rent was payable from the time that the flats became fully occupied in mid-1945. However, he continued in an obiter statement that if Central London had tried to claim for the full rent from 1940 onwards, they would not have been able to. This was reasoned on the basis that if a party leads another party to believe that he will not enforce his strict legal rights, then the Courts will prevent him from doing so at a later stage. This obiter remark was not actually a binding precedent, yet it essentially created the doctrine of promissory estoppel. If I were to consider this matter without regard to recent developments in the law, there is no doubt that had the plaintiffs claimed it, they would have been entitled to recover ground rent at the rate of 2,500 a year from the beginning of the term, since the lease under which it was payable was a lease under seal which, according to the old common law, could not be varied by an agreement by parol (whether in writing or not), but only by deed. Equity, however stepped in, and said that if there has been a variation of a deed by a simple contract (which in the case of a lease required to be in writing would have to be evidenced by writing), the courts may give effect to it as is shown in Berry v. Berry [1929] 2 K. B. 316. That equitable doctrine, however, could hardly apply in the present case because the variation here might be said to have been made without consideration. With regard to estoppel, the representation made in relation to reducing the rent was not a representation of an existing fact. It was a representation, in effect, as to the future, namely, that payment of the rent would not be enforced at the full rate but only at the reduced rate. Such a representation would not give rise to an estoppel, because, as was said in Jorden v. Money (1854) 5 H. L. C. 185, a representation as to the future must be embodied as a contract or be nothing. But what is the position in view of developments in the law in recent years? The law has not been standing still since Jorden v. Money (1854) 5 H. L. C. 185. There has been a series of decisions over the last fifty years which, although they are said to be cases of estoppel are not really such. They are cases in which a promise was made which was intended to create legal relations and which, to the knowledge of the person making the promise, was going to be acted on by the person to whom it was made and which was in fact so acted on. In such cases the courts have said that the promise must be honoured. The cases to which I particularly desire to refer are: Fenner v. Blake [1900] 1 Q. B. 426, In re Wickham (1917) 34 T. L. R. 158, Re William Porter & Co., Ld. [1937] 2 All E. R. 361 and Buttery v. Pickard [1946] W. N. 25. As I have said they are not cases of estoppel in the strict sense. They are really promises - promises intended to be binding, intended to be acted on, and in fact acted on. Jorden v. Money (1854) 5 H. L. C. 185 can be distinguished, because there the promisor made it clear that she did not intend to be legally bound, whereas in the cases to which I refer the proper inference was that the promisor did intend to be bound. In each case the court held the promise to be binding on the party making it, even though under the old common law it might be difficult to find any consideration for it. The courts have not gone so far as to give

a cause of action in damages for the breach of such a promise, but they have refused to allow the party making it to act inconsistently with it. It is in that sense, and that sense only, that such a promise gives rise to an estoppel. The decisions are a natural result of the fusion of law and equity: for the cases of Hughes v. Metropolitan Ry. Co. (1877) 2 App. Cas. 439 , 448, Birmingham and District Land Co. v. London & North Western Ry. Co. (1888) 40 Ch. D. 268 , 286 and Salisbury (Marquess) v. Gilmore [1942] 2 K. B. 38 , 51, afford a sufficient basis for saying that a party would not be allowed in equity to go back on such a promise. In my opinion, the time has now come for the validity of such a promise to be recognized. The logical consequence, no doubt is that a promise to accept a smaller sum in discharge of a larger sum, if acted upon, is binding notwithstanding the absence of consideration: and if the fusion of law and equity leads to this result, so much the better. That aspect was not considered in Foakes v. Beer (1884) 9 App. Cas. 605. At this time of day however, when law and equity have been joined together for over seventy years, principles must be reconsidered in the light of their combined effect. It is to be noticed that in the Sixth Interim Report of the Law Revision Committee, pars. 35, 40, it is recommended that such a promise as that to which I have referred should be enforceable in law even though no consideration for it has been given by the promisee. It seems to me that, to the extent I have mentioned, that result has now been achieved by the decisions of the courts. I am satisfied that a promise such as that to which I have referred is binding and the only question remaining for my consideration is the scope of the promise in the present case. I am satisfied on all the evidence that the promise here was that the ground rent should be reduced to 1,250 a year as a temporary expedient while the block of flats was not fully, or substantially fully let, owing to the conditions prevailing. That means that the reduction in the rent applied throughout the years down to the end of 1944, but early in 1945 it is plain that the flats were fully let, and, indeed the rents received from them (many of them not being affected by the Rent Restrictions Acts), were increased beyond the figure at which it was originally contemplated that they would be let. At all events the rent from them must have been very considerable. I find that the conditions prevailing at the time when the reduction in rent was made, had completely passed away by the early months of 1945. I am satisfied that the promise was understood by all parties only to apply under the conditions prevailing at the time when it was made, namely, when the flats were only partially let, and that it did not extend any further than that. When the flats became fully let, early in 1945, the reduction ceased to apply. In those circumstances, under the law as I hold it, it seems to me that rent is payable at the full rate for the quarters ending September 29 and December 25, 1945. If the case had been one of estoppel, it might be said that in any event the estoppel would cease when the conditions to which the representation applied came to an end, or it also might be said that it would only come to an end on notice. In either case it is only a way of ascertaining what is the scope of the representation. I prefer to apply the principle that a promise intended to be binding, intended to be acted on and in fact acted on, is binding so far as its terms properly apply. Here it was binding as covering the period down to the early part of 1945, and as from that time full rent is payable. I therefore give judgment for the plaintiff company for the amount claimed. Impact The doctrine of promissory estoppel has had a major impact on English and Irish contract law since the High Trees case. Debates surrounding the expansion and application of the doctrine have included whether or not detrimental reliance is required in order to bring the doctrine into effect, whether the doctrine can create a cause of action or merely provide a defence to a cause of action and whether or not the evolution of the doctrine has abrogated or abolished the rule in Pinnel's case.

In Amalgamated Investment Co v Texas Bank [1982] Q.B. 84 it was held that the doctrine could act as a sword and not merely as a shield (that is, it could be used as a cause of action rather than merely providing a defence to an action). Attempts have been made to utilize the doctrine of promissory estoppel after High Trees to create a new inroad into the rule in Pinnel's case that an agreement to accept part payment of a debt in full satisfaction of it is unenforceable for want of consideration. In the High Trees case Lord Denning commented, obiter, that such an agreement should now be enforceable under the doctrine of promissory estoppel. However, the courts have traditionally been reluctant to overrule cases like Pinnel's case and Foakes v Beer as they have formed part of the common law for so long. Lady Justice Arden in Collier v P & MJ Wright (Holdings) Ltd [2007] EWCA Civ 1329 accepted in principle that High Trees could be used to extinguish a creditor's right to full payment of a debt in such circumst.

***Can be used as a Shield and not as a Sword (BUT SEE: Waltons v Maher and W v G) ***There need to exist a contractual relationship (BUT SEE: Waltons v Maher and W v G)

ion Walton Stores (Interstate) Ltd v Maher (1988) 76 ALR 513 Facts Australia


W negotiated for some months with M for the grant of a lease over property owned by M. It was understoo would demolish an existing building and erect a new one for W to occupy. W required the plans etc be prep its needs. Agreement was reached on terms and rent.

Solicitor for W sent draft lease to solicitors for M on 21 October and some changes were discussed and acc A revised lease with amendments was sent by M to W. In November M informed W that demolition work commenced so that it was important to conclude the lease quickly before Christmas shutdown.

Later in November W started to have some reservations and (having been informed it was not bound by the instructed solicitors to go slow. In early January M commenced building, but later in the month W inform not wish to proceed; building work was 40% complete. M sought to enforce the agreement. History M succeeded at first instance and on appeal. W appealed to the HC. Held (Mason CJ and Wilson J) (1) M did not believe that contracts had been exchanged when they embarked on demolition (2) However, were entitled to assume the exchange was a mere formality (3) Promissory estoppel extends to representations or promises as to future conduct

(4) No reason in principle why cannot apply to preclude departure from representation that representor will enforce a non contractual right (5) For a non-contractual promise to be enforceable directly (a) Promisor must make promise (c) Promisee must rely on this to detriment (d) must be unconscionable, having regard to the promisors conduct, for the promisor to be free to ignore As a consequence, promissory estoppel in Australia may be used as both a sword and a shield:

(b) Promisor must create to encourage an assumption that contract will come into existence/ promise will b

Equity grants relief because it would be unconscionable conduct on the promisors part to ignore the assum

"Promissory estoppel, it has been said, is a defensive equity and the traditional notion has been that estopp be relied upon defensively as a shield and not as a sword High Trees ([1947] K.B. 130) itself was an insta defensive use of promissory estoppel. But this does not mean that a plaintiff cannot rely on an estoppel. .

But the respondents ask us to drive promissory estoppel one step further by enforcing directly in the absenc existing relationship of any kind a non-contractual promise on which the representee has relied to his detr principal objection to the enforcement of such a promise is that it would outflank the principles of the law o

the doctrine [of promissory estoppel] extends to the enforcement of voluntary promises on the footing th departure from the basic assumptions underlying the transaction between the parties must be unconsciona failure to fulfil a promise does not of itself amount to unconscionable conduct, mere reliance on an executo do something, resulting in the promise changing his position or suffering detriment, does not bring promis into play. Something more would be required. this may be found, if at all, in the creation or encourage party estopped in the other party of an assumption that a contract will come into existence or a promise wi performed and that the other party relied on that assumption to his detriment to the knowledge of the first p

[In this case] the crucial question remains: was the appellant entitled to stand by in silence when it must h that the respondents were proceeding on the assumption that they had an agreement "

The answer was no their Honours considered the element of urgency surrounding the negotiation and th the respondents that completion was a mere formality, in circumstances where W knew that M was perform work. In those circumstances, W was under an obligation to communicate with M within a reasonable tim receiving the executed lease at least to warn M that it may not proceed. Inaction of W, in the circumstan constituted clear encouragement or inducement to the respondents to continue to act on the basis of the ass which they had made and that was unconscionable. The appellant was estopped from reneging on its im to complete the contract.

Here the mere exercise of legal right not to exchange contracts not unconscionable - but there were two add elements: (a) element of urgency and (b) M executed and forwarded on 11/11 and assumed that execution b formality

W was under obligation in the circumstances to communicate within reasonable time and certainty when it demolition. Had to choose whether to warn or proceed. Inaction constituted, in the circumstances, clear en or inducement to M to continue to Act on basis of assumption made. Was unconscionable conduct to adapt did Estopped from retreating from implied promise to complete. Brennan J

Equitable estoppel arises where: (a) P assumed a particular legal relationship existed between the parties (or expected that it would); (b) D has induced that assumption in P; (c) P acts (or abstains from acting) in reliance on the assumption; (d) D knew or intended him to so act; (e) Ps action/inaction will case him/her detriment if the assumption is not fulfilled (f) D has failed to act to avoid that detriment (eg, by fulfilling expectation)

His Honour also made clear that the remedy for promissory estoppel should go no further than what is nece prevent the unconscionable conduct in this respect, the object of the equity is not to compel D to fulfil the assumption, but to avoid the detriment that P will suffer if the expectation is not fulfilled [Deane and Gaudron also dismissed the appeal] Bangladesh Scenario:Sec 63: Every promisee - may dispense with or remit,wholly or in part, the performance of promise made to him, or - may extend the time for such or - may accept instead of it any satisfaction which he thinks fit. performance, the