Free Research Paper On History Of Australian Promissory
Business Law Australia
Business Law Australia
The doctrine of Promissory Estoppel is a doctrine, which a court use to prevent a litigant from taking an action that the litigant is normally entitled in order prevent an inequitable result (Turner & Trone, 2013). Estoppel is used when a party that reasonably relied on promises of another party is hurt because that other party felt to keep the promise. For example, it stops a person from asserting or denying anything to the converse of that which had been established to be the truth in the contemplation of law. Estoppel is a law of evidence. It prevents a person from denying a fact, which had been settled. The claim of estoppel is connected closely to the claim of waiver. The goal of the two is ensure bona fides in every day’s transactions. It is used in many areas of contract law that include banking, employment, and insurance. Estoppel is applied mainly where an agreement is future based. The doctrine of Promissory Estoppel is therefore very significant as it thwart unjust outcomes, which can result from exact application of the common law. However, in Australian courts, estoppels has been expanded that the consideration is no longer important.
As mentioned earlier, promissory estoppels is a lawful doctrine, which can be utilized in certain situations to prevent an individual from claiming back a right he/she had desert to someone else he/she had made a promise. The person ought to have accepted not to receive partly or in all his/her right without a certain consideration. In the same manner, it points to a promise, which an individual made to another party. Concerning a promise, the promissory estoppel is applied when an individual, who is a promisor failed to tell the promisee of his/her failure to respect the promise. Promissory estoppel required that a person make a true representation of his/her promise. Estoppel comes from the word stop that means the law ought to prevent an unjust course of a party from an assumption that he/she had made to another party.
Relevant case laws
Hughes v Metropolitan Railaway Co (1877)
In the case, a tenant was given a notice to repair a defect in the property within six month. During the time, the tenant decided to it was better to sell their remaining interest back to the landlord instead of incurring expenses of repairs. However, the two parties did not agree to sell of interest (Ellinghaus, 2007). It was thus held that while the negotiation were ongoing, an implied acceptance that the notice period did not apply anymore. The landlord attempt to eject the tenant for failure to repair the defect within the required time failed. However, the two parties in the case had not made a promise to each other, but there was a mere understanding due to the failed agreement. The court made conclusions based on the implied understanding.
Birmingham and District Land Co v London and NW Railway (1888)
In the case, a period in a contract was held not apply was thought not to apply due to the understanding that it could not run while the building operations had been stopped (Ellinghaus, 2007). The court concluded that if an individual who has contractual rights against another create the view that his/her contract would not be applied for a certain period of time, will not be allowed to applied that contract until that time has elapse. Even though this case is does not display the doctrine of promissory estoppels, it portray the use of fairness and not on the consideration of artificialities, and technicalities has before.
Central London Property Trust v High Trees House Ltd (1947)
In the case, a landlord, who was unable to find enough tenants because of the evacuation of London during the war requested a tenant to remain by reducing rent from £2500 to £1250. The tenant acted as per the agreement for five years (Ellinghaus, 2007). When the war ended, and the occupancy level was normal in the landlord required his tenant to pay the arrears. In the case, the judges said that tenant had acted correctly. The plaintiff, who was the landlord, was thus not entitled to demand the arrears. According to them, the doctrine of estoppel required that an existing fact be represented to exist in future. However, the court had not tried to offer a cause of action. However, they recognized that based on Hughes and Birmingham case, there were enough reason to recognize existent of a promise. In the case, a promise exited because the landlord had required the tenant to start so that he could pay half the amount of the rent. However, the promise had not been represented clearly. It did not exist in future.
Combe V Combe (1951)
The case involved a husband’s promise to his wife. The husband had promised his wife to be giving her £100 as maintenance amount per year. The wife demanded for payment even though she had not received an official order from the divorce court. In the trial, the judge enforced the promise based on High Trees (1947) (Ellinghaus, 2007). According to the judge, the promise was an unequivocal acceptance to a liability, which was intended to bind and be acted upon.
D & C Builder Ltd v Rees (1966)
In the case, builders sent an account after completing their work. However, the work was left outstanding in a long period. Eventually, the wife of the owner of the house accepted to pay a small amount of the money owed. However, before she made the payments, she demanded that the builders accept it in full satisfaction of the debt (Ellinghaus, 2007). The builders accepted because they were in a difficulty financial situation. The wife of the owner of the house knew the builders needed the money so that they could not be declared bankrupt. In the cheque the builders recognize that the amount had been paid in full. Nonetheless, they claimed the balance later.
In this situation, the wife used pressure to break the contract. There was no true accord between the people involved. The case thus mitigated the harshness of the common law. The wife took advantage of the equitable rule. The case called for consideration of various issues of consideration (Ellinghaus, 2007).
Legione v Hateley (1983)
Legione v Hateley (1983) is the first case in Australia was the first case that doctrine of estoppel was used by the High Court. However, the High Court did not find very satisfactory fact. The court could not apply the doctrine estoppel. A buyer of a property required an extension of time from a solicitor to search for enough money to buy the property. However, his agreement with a solicitor of the vendor was repealed a few days (Ellinghaus, 2007).
According to the court, the etoppel was not clear. It could be implied, but was not represented clearly by the secretary. There had been known conduct or statement that indicated that an extension had been promised. There was no assurance that the legal rights would be emphasized later (Ellinghaus, 2007).
Je Mainteindrai Pty Ltd v Quaglia (1980)
In the case, the rent of a property had been reduced for a period of eighteen months. When the landlord found out that the tenant was about to vacate the premise, he demanded full arrears. Even though, the case was a great test of the estoppel in Australia, the court pointed out that estoppel was not applicable. According to the court, a person who makes a promise had right to repeal a promise unless it would result in some injustice or detriment.
Walton‘s Store Ltd v Maher (1988)
In the case, Mr. Maher had leased land to Walton’s Store. However, the land had an old building yet Walton required an all-purpose ready with six months. Therefore, the building had to be demolished under the leased agreement. After the agreement, Maher started to demolish the building. When he was continuing with the construction of the new house, Walton informed Maher that they could not continue with the agreement (Ligertwood, 2004).
Maher sued Walton’s Stores arguing that they be prevented from denying the contract. At the beginning of the case, the court based most its arguments on the technical features of the common law estoppel. However, as the case progress, the court started to consider the opinions about shields and swords. The basis of the argument thus changed. Nonetheless, Maher won in all levels.
Present status of Doctrines of Australian Estoppel
Although the doctrine has been used in deciding various cases discussed above in Australia, it is in a state of development. One doctrine of estoppel provides that a court of common equity or law have to do what is required of them and no more to prevent a person who relied on an assumption. The person’s assumption of a present, past or future state of affairs ought to have induced a person to suffer detriment in dependence on the assumption (Raath, 2009). These doctrines as others are prepared in general terms thus leaving many questions open on its practical applicability and its interrelationship with other laws. The broad structure of a novel doctrine of Australian estoppels, seems clear at a distant but on closer examination, it becomes imprecise. The High Court’s decisions, which were instrumental in the development of the doctrine, have offered multiple judgments that are usually cast in terminologies that are both rare and different (Raath, 2009).
Even though it is possible to determine one single formulation of distinctive doctrine, which is emerging, it had to give a single depiction of Australian estoppel. One distinctive feature of Australian estoppel is the doctrine requirement that a judge ought to balance various considerations in order to determine what should be applied. The application does not simply involve syllogistic use of a legal rule (Raath, 2009). Due to this structure, application of Australian estoppel yield unpredictable outcomes.
There are eight features of parties’ relationship and dealings, which a judge ought to consider when establishing whether or not; it would be unconscionable for a party, who provoke an assumption to remedy a detriment that another party suffered for his/her reliance. The first feature requires a judge to determine when to determine that unconscionable behaviors exist. Secondly, the judge has to decide whether the obligation to ensure the dependability on the induced assumptions arises in a case (Raath, 2009). The third, fourth, fifty, sixty, and seventy features, like the first two features, deal with aspects of the parties’ relationship and dealings. The eighty feature deals with any action the party, whom the obligation rests (Raath, 2009).
Comparison with U. S’s Promissory Estoppel
Unlike in Australia, the U.S. has made great strides in using the Promissory Estoppel in settling various disputes. One of the earliest cases is Hamer v. Sidway. In the case, Louise Hamer had sued Franklin Sidway, William E. Story I’s executor for the sum of 5,000 U.S dollars. William E. Story I had on March 20, 1869 promised William E. Story II, his nephew, 5,000 U.S dollars if could abstain from using tobacco, drinking alcohol, and playing billiards or cards for money until he reached 21 years of age. Story II accepted the promise and abstained from the forbidden acts until he reached 21 years (Blum, 2007).
In the Court of Appeal, Judge Alton Parker declared that Sidway was legally bound to give Hamer a sum of 5,000 U.S because the forbearance, according to him, was a valid consideration given by Story II. Parker based his definition of consideration on Exchequer Chamber’s 1875, which described a valuable consideration as interest, profit, right, or benefit accrued a party and given, undertaken, or suffered by another (Blum, 2007).
In the decision of the case, Judge Parker did not consider whether, the fact benefited the promise or the third party. He did not also consider whether, the decision had substation value or benefit to anyone. Instead, he considered whether the promise was made, suffered, or forbone by a party to whom the promise was made. He tracked his definition of consideration from at the time obtainable from England. Apart from adopting the definition from England, he cited Currie verse Misa in the English Exchequer Chamber (Blum, 2007).
The doctrine of Promissory Estoppel is a doctrine, which a court uses to prevent a litigant from taking an action that the litigant is normally entitled in order prevent an inequitable result. However, Austrian estoppel, is not easy to utilize. In U.S, where the doctrine of promissory developed, a judge has to utilize the element of a bargain to determine a case between two parties. It is thus easy to determine the case. However, in Australia, estoppels has been expanded that the consideration is no longer important. Unlike in the U.S, Judges have to consider other factors other than the element of bargain. For instance, in the Walton‘s Store Ltd v Maher (1988), judges had to consider the technical features of the common law estoppels and later the opinions about shields and swords.
List of References
Blum, B. A. 2007. Contracts: examples & explanations. New York: Aspen Publishers.
Barnett, R. E. 2008. Contracts: cases and doctrine. Austin:Wolters Kluwer Law & Business.
Ellinghaus, M. P. 2007. Australian cases on contract. [Melbourne, Vic.?]: Code Press.
Ligertwood, A. L. C. 2004. Australian evidence. Chatswood, NSW: LexisNexis Butterworths. Raath, A. 2009. Discoursing with Finnis and revisiting Tshwane - a legal-philosophical refocusing on commutative justice and estoppel by representation in public law. Journal for Christian Scholarship = Tydskrif Vir Christelike Wetenskap. 45, pp.33-56.
Turner, C., & Trone, J. 2013. Australian commercial law. Sydney: Lawbook Co.
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