FACULTY OF LAW & GOVERNMENT

Department of Law

NAME OF STUDENT : Adrienne Sena

STUDENT ID NUMBER : B 1302604

SUBJECT NAME : Law of Contract

SUBJECT CODE : DL 1

NAME OF EXAMINER : Vilmah Balakrishnan

WORD COUNT : 3307 words

 Index

No. Content Page No

1. Table of Authorities 3-4

2. Question 5

3. Answer 6-17

4. Bibliography 18-21

5. List of References 22-24

6. Turn-It-In Report 25-41

2
 Table of Authorities
No. Case Names Citation Page Number

1. Currie v Misa [1875] LR 10 Ex 153 6

2. Antons Trawling Co v [2003] 2 NZLR 23 6

Smith
3. New Zealand Shipping Co [1975] AC 154 6
Ltd v AM Satterhwaite &
Co Ltd
4. Hughes v Metropolitan [1877] 2 AC 439 7
Railway

5. Central London Property [1947] 1 KB 130 7

Trust v High Trees House

6. D & C Builders v Rees [1966] 2 QB 617 7

7. Woodhouse AC Israel [1972] AC 941 7

Cocoa SA v Nigerian
Produce Marketing Co Ltd
8. Combe v Combe [1951] 2 KB 215 8

9. Tweddle v Atkinson [1861] EWHC QB J57 8

10. Pao on v Lau Yiu Long [1979] 3 All ER 65 Privy 8

Council
11. Jones v Padavatton [1979] 1 WLR 328 8

12. Chappell & Co v Nestle [1960] AC 87 8

Co Ltd
13. Waltons Stores [1998] 164 C.L.R 387 10
(Interstate) Ltd v Maher (H.C.A)
14. Gay Choon Ing v Loh Sze [2009] 2 S.L.R 332 (CA) 10
Ti Terence Peter
15. Williams v Roffey Bros & [1991] 1 QB 1 12
Nicholls (Contractors) Ltd
16. Stilk v Myrick [1809] 170 ER 1168 12

3
17. Ward v Byham [1956] 1 WLR 496 13

18. Williams v Williams [1957] 1 WLR 148 13

19. Foakes v Beer [1884] UKHL 1 13

20. Re Selectmove Ltd [1993] EWCA Civ 8 14

21. Musumeci v Winadell Pty [1998] 34 NSWLR 723 14

Ltd
22. Thompson v Palmer [1993] 49 CLR 507,547 14

23. Je Maintiendrai Pty Ltd v [1980] 26 SASR 101 15

Quaglia
24. Collier v P & MJ Wright [2008] 1 WLR 43 15
(Holdings) Ltd
25. Pinnel’s Case [1602] 5 Rep 117 15

26. Syros Shipping Co SA v [1980] 2 Lloyd’s Rep 390 15

Elaghill Trading Co
27. Baird Textile Holdings Ltd [2001] EWCA 274 16
v Marks and Spencer plc
28. Burbery Mortgage 16
Finance and Savings Ltd [1989] 1 NZLR 356
v Hindsbank Holdings Ltd
29. Gilbert Steel Ltd v [1973] 36 DLR (3d) 496 16
University Construction
Ltd
30. Commonwealth v [1990] HCA 39 17
Verwayen

4
 Question
“Estoppel is a mechanism for enforcing consistency; when I have said or done

something that leads you to believe in a particular state of affairs, I may be obliged to

stand by what I have said or done, even though I am not contractually bound to do

so.”

E Cooke, The Modern Law of Estoppel (OUP, 2000) 1-2

While the doctrine of promissory estoppel was developed to negate the harm caused

by the promisor’s unconscionable inducement of the promisee’s reliance, the

doctrine now appears well placed as an alternative to consideration.

Is this true? Critically assess the accuracy of the statement above. Examine this

issue in the light of developments in the area of promissory estoppel in the United

Kingdom and Australia.

5
 Answer
A contract is an agreement enforced by law and includes elements like offer,

acceptance and consideration.1 This essay aims to evaluate the doctrine of

consideration and promissory estoppel as well as discuss whether UK courts should

follow the Australian footsteps in replacing consideration with promissory estoppel.

The doctrine of consideration as explained in Currie v Misa2 is ‘…either some

right, interest, profit, or benefit accruing to one party, or some forbearance,

detriment, loss or responsibility, given, suffered, or undertaken by the other’. It is also

described as a price which parties of a contract give to each other for respective

promises. Consideration prioritises bargains and is important as it reflects the

serious undertakings of both parties entering the agreement 3 as explained in Antons

Trawling Co v Smith4 whereby the judge explained that consideration ‘…is a

valuable signal that the parties intend to be bound by their agreement, rather than an

end itself’. It is also an enforcement of bargains which upholds welfare maximisation

and shows the idea of reciprocity. 5 Parties in the contract will have to give a “benefit”

and suffer a “detriment” which will be found or “invented” by courts in order for

consideration to be sufficient and only then will a contract be valid and binding.

Consideration also consists of other elements like past consideration is insufficient,

consideration must move from the promisee, existing public and contractual duties

will not suffice as consideration, part payment of debt does not amount to

consideration for a promise to forego the balance and that consideration only needs

1
As held by Lord Wilberforce in New Zealand Shipping Co Ltd v A M Satterthwaite & Co Ltd (The Eurymedon)
[1975] AC 154
2
[1875] LR 10 Ex 153
3
Mindy Chen-Wishart, Contract Law ( 3rd edition, Oxford University Press, 2010) 121
4
[2003] 2 NZLR 23 by Baragwanath J of the New Zealand Court of Appeal
5
G H Treitel, An Outline of The Law of Contract (5th edition, Butterworths, 1995) 29 explains that reciprocity is
that a promisee should not be able to enforce the promise, unless he has given (or promised to give), or unless
the promisor has obtained (or been promised), something in exchange for it

6
to be sufficient, not adequate. Although the doctrine has been long adopted by UK,

there are problems with the doctrine as addressed by courts and thus, the doctrine of

promissory estoppel was created to alleviate the unfairness of consideration.

Promissory estoppel is an equitable doctrine which originated from the

doctrine of waiver. The UK courts had created this to mitigate the strict laws of

consideration, not replace it. It was first raised in Hughes v Metropolitan Railway6,

where Lord Cairns LC held that ‘…if [contracting parties] -- 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 under the contract will

not be enforced…the person who otherwise might have enforced those rights will not

be allowed to…where it would be inequitable…’. The concept was later solidified in

Denning J’s orbiter statement in Central London Property Trust v High Trees

House7 whereby had Central London sued the defendants between 1940 and 1945;

they would be estopped from such claims as promissory estoppel does not allow one

to go back on a promise given, although no consideration was exchanged between

the parties. The requirements8 of promissory estoppel are that there must be a clear

and unequivocal promise9 between two parties, there was reliance on the promise by

either parties and it would be inequitable to go back on the promise due to the

reliance. The effect of it is suspensory, not extinctive, unlike consideration whereby

the promise is fully enforceable. As an equitable doctrine, it can only be used as a

shield and not as a sword as ‘he who comes to equity must come in clean hands’,

such in D&C Builders v Rees10 where the courts held that Mrs. Rees’s actions were

inequitable and she could not rely on promissory estoppel. Thus, consideration and

6
[1877] 2 AC 439
7
[1947] 1 KB 130
8
Mindy Chen- Wishart (n 3) 165
9
Woodhouse AC Israel Cocoa SA v Nigerian Produce Marketing Co Ltd [1972] AC 941, House of Lords
10
[1966] 2 QB 617

7
promissory estoppel are two separate doctrines where the former can be used as a

basis for legal claims while the latter is used only for defences against legal claims. 11

Although both doctrines are different in nature, they are supplementary as

promissory estoppel helps alleviate the unfairness of consideration.

One of the reasons why promissory estoppel was created was due to the

inaccuracy in the doctrine of consideration. There has been various interpretation of

the definition of a valuable consideration 12 which includes the rule that a benefit or

detriment should be present in order to constitute good consideration. Theoretically,

as long as either a benefit or detriment is present to either contracting parties, there

is sufficient consideration. However, stemming from ‘consideration must move from

the promisee’13, both parties seem to need to provide consideration to make the

contract enforceable and thus become vague whether a benefit given to the promisor

with no detriment to the promisee will be ‘good’ consideration or not. 14 There may

also be cases where consideration comprises of detriments to the promisee with no

corresponding benefit to the promisor 15 and as such, the definition itself is unclear.

Moreover, there lies a problem in the value of the consideration requested by the

parties. As Smith says, ‘[It is only necessary for the defendant to expressly or

implicitly ask for something in return for his to make his promise sufficient for

consideration]’. When a party requests for something in exchange for his promise,

there has to be some value which the party attaches to it. Nevertheless, the concept

of value is subjective and although the contracting parties see a benefit or detriment

to it, the courts may not. Courts may also “invent” consideration like in Chappell v
11
Combe v Combe [1951] 2 KB 215 In this case, it shows that promissory estoppel can only be used as a
defence for legal claims and not as a legal claim itself
12
Mindy Chen- Wishart (n 3) 128-129
13
Tweddle v Atkinson [1861] EWHC QB J57 This case provides that a party cannot enforce a contract unless
consideration was provided
14
Pao On v Lau Yiu Long [1979] 3 All ER 65 Privy Council
15
Jones v Padavatton [1979] 1 WLR 328

8
Nestle16 thus creating uncertainty which may be unfair in promises such as bargains

or gifts where the parties attach some consideration in it but may not fall within the

doctrine as courts may not find the consideration valuable hence making the promise

unenforceable. The vague definition of ‘value’ here makes consideration inaccurate

and unfair thus promissory estoppel was created to overcome this.

Promissory estoppel as mentioned above is the enforcement of promises

without consideration.17 Cooke18 says that: ‘Estoppel is a mechanism for enforcing

consistency; when I have said or done something that leads you to believe in a

particular state of affairs, I may be obliged to stand by what I have said or done,

even though I am not contractually bound to do so’, thus, it allows promises with

serious intention but lacking consideration to be enforced. This remedies the issue

where in some cases; the courts deem consideration as absent or insufficient

although the parties intend to be bound like in bargains, conditional gifts and

gratuitous promises. Moreover, it prevents the courts from “inventing” consideration

when it was not the intended purpose of the promisor to obtain it 19 and thus protects

both contracting parties. Although based on the protection of reliance, promissory

estoppel often holds the promisor to his promise and thus protects the promisee’s

expectation instead. As seen, there is a clash between consideration and promissory

estoppel. Reliance loss theory puts a claimant in his original position as if the

contract had not been made while expectation loss seeks to put the innocent party in

the position as if the contract was performed. UK courts thus face more confusion as

the two different doctrines yield overlapping effects. However, Australian courts has

16
Chappell & Co v Nestle Co Ltd [1960] AC 87 In this case, Treitel argues that UK courts can ‘invent’
consideration by treating an act or forbearance as consideration although it was not the promisor’s purpose to
obtain it
17
Denning J held in Central London Property Trust Ltd v High Trees House Ltd [1947] that “A promise intended
to be binding, intended to be acted upon, and in fact acted on, is binding so far as its terms properly apply”
18
E Cooke, The Modern Law of Estoppel (OUP,2000) 1-2
19
(n 16)

9
been said to remedied this issue in Waltons Stores (Interstate) Ltd v Maher 20 by

stating that they both produce different liabilities. Consideration gives a contractual

cause of action for the full expectation of the promisee while promissory estoppel

responds to the promisor’s unconscionable refusal to carry out his promise after the

promisee had relied on it. As such, there is no clash within the two doctrines if courts

were to distinguish them clearly and promissory estoppel could replace consideration

in order to overcome the vagueness.

Besides that, the sufficiency and necessity of consideration is arguable. As

Charles Fried21 argues, the rule that ‘consideration need not be adequate’ supports

the idea that ‘the free arrangements of rational persons should be respected’. This

may be problematic as it recognises any trifling benefit or detriment to amount to

valid consideration and thus allows form to triumph over substance 22, thus

undermining the bargain theory of contract. 23 This is seen in nominal considerations:

Chappell & Co. Ltd v Nestle Co .Ltd.24This type of consideration is stated only for

form and as Atiyah observes, is ‘the clearest possible indication that the promisor

intended his promise seriously…’ and intended to make the contract legally

enforceable. As for the necessity of consideration, Phang J.A suggests 25 that the

‘marrow of contractual relationships should be the parties intention to create a legal

relationship’ and had supported this statement by quoting the UK committee 26 which

suggests that the very existence of a contract already show the parties intention as
20
[1998] 164 C.L.R. 387 (H.C.A.) Brennan J justifies the clash by stating that the two doctrines yield two
separate results and thus both can be used as a cause of action
21
Fried, “For an Argument for the Enforcement of Gratuitous Promises Based on an Economic Analysis”, 1981
22
Mindy Chen-Wishart, Contract Law, (3rd edition, Oxford University Press) 132
23
Fried (n 21) 35 The bargain theory of contract as explained by Fried is that something has to be given in
exchange for a promise to make the promise be enforceable. He also explains it as “the free arrangements of
rational persons”
24
( n 16) In this case, three stipulated chocolate wrappers were held as sufficient consideration for a gramophone
record and thus show that even the most trifling benefit or detriment qualities can be valid consideration
25
Gay Choon Ing v Loh Sze Ti Terence Peter [2009] 2 S.L.R. 332 (CA)
26
The UK Committee proposed that the effect of consideration is merely evidence of serious intention to contract
and that consideration should be dispensed with where evidence of the promise is otherwise available, such as
where the promise is in writing

10
they took additional efforts to enforce the contract. If they were not serious about

being bound, why would they go the extra mile and make the contract? In executory

bilateral contracts, a promise is given first before it is performed and hence

consideration does not arise until contract has been performed partly or completely

but is still enforceable in courts. This shows that consideration is not a necessity in

proving the intention of parties. Hence, it can be argued that consideration may

neither be necessary nor sufficient when enforcing a contract and should be

replaced.

The suggestion to replace consideration with promissory estoppel is justified

as the doctrine uses ‘reliance’ as an enforceability test. Courts would enforce

promises solely based on whether there was reliance by the promisee on the

promise which makes it unfair for the promisor to go back on the commitment of the

promise. Without the narrow scope and strict requirements of consideration,

promissory estoppel is flexible enough to allow the law to adapt to different cases,

especially cases where the promisee is at a disadvantage. Treitel rebutted the

argument about the sufficiency of consideration by stating that the ‘adequacy of

consideration is immaterial’27 and that nominal consideration follows the adequacy

rule as the doctrine does not deal with whether the bargain was favourable to both

parties or not. Moreover, he argued that the doctrine is not wholly unfair as there are

exceptions to it. Nevertheless, consideration should not be the primary or sole test of

enforceability as it is evident that although there are exceptions to it, the doctrine has

strict rules which must be followed. However in promissory estoppel, as long as the

claimants relied on a clear promise and was unconscionable for the defendants to go

back on the promise, claimants would be able to claim damages. Mentioned above,

the doctrine prevents the redundancy of consideration and intention to create legal
27
G H Treitel, ‘A critical analysis of Professor Atiyah’s fundamental restatement’, [1976] ALJ 50

11
relation. As suggested, in a contract, the State should not interfere in ‘evaluating

choices made by individuals’28 and that the decisions of contracting parties should be

neutral and subjective as it lies within their intentions, not the courts. Nevertheless,

Atiyah argues that it is rare to find instances where a promise is enforced with no

benefit or detriment given and that courts would be able to “invent” these benefits or

detriments29, even if they arise from motives. Thus, UK courts should consider the

developments in other jurisdictions like Australia’s whereby they have moved away

from consideration and have moved towards promissory estoppel as a test of

enforceability.

Another problem with consideration is that the rule practical benefit can

amount to sufficient consideration is limited in different ways. The general rule is that

the performance of an existing contractual duty or a promise to perform an existing

duty does not amount to consideration. 30 However, later in Williams v Roffey

Bros31, the courts held that the promise to pay more to perform an existing duty can

be enforced if a practical benefit is given and that this additional benefit would be

counted as good consideration. In Williams v Roffey Bros, the defendants had to

pay the extra sum promised as the promise given had helped Williams (carpenters)

to finish up their work thus giving them a practical benefit –avoidance of the penalty

clause, avoidance of trouble in finding new carpenters and preventing a breach of

contract. Thus, this case demonstrates that consideration is needed to enforce

promises of more for the same but it need not be just legal benefits; it can consist of

practical benefits too. Besides that, the promise must be given voluntarily without

28
Mindy Chen- Wishart, “Consideration and Serious Intention”, [2009] Sing J.L.S. 434,442
29
In Chappel & Co Ltd v Nestle Co.Ltd the courts held that there was an indirect benefit which was derived from
the motive of the promise
30
Stilk v Myrick [1809] 170 ER 1168 The courts held in this case that there was no consideration for the promise
to pay the sailors more money as they were doing what they were originally obliged to do under the existing
contract
31
Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1

12
improper pressure.32 Firstly, it is limited because the definition of “practical benefit” is

unclear. The Court of Appeal failed to define what amounted to a “practical benefit”.

For an example, Lord Justice LJ held that consideration existed from the

‘advantages accruing to them as a consequence of the plaintiffs guaranteed

performance’. He did not define what “practical benefit” meant but merely concluded

that a secondary promise under an existing contract is enforceable as long as the

‘promisor obtained an advantage arising out of the continuing relationship with the

promisee’.33 Lord Justice Purchas’s concluded similarly whereby a consideration

would be found in secondary promises as long as there was a “commercial

advantage” received. In Glidewell LJ’s leading judgement, His Honour had only

shown the circumstances where a “practical benefit” may arise by citing previous

judgements34 but also failed to define “practical benefit”. Above all these, other

judges had different views of what “practical benefit” meant and this makes the term

too ambiguous35,widening the scope of consideration and as such “[emaciates] the

doctrine to the point of abolition”. 36

Secondly, the concept of a practical benefit is limited in terms of its

application. This is said because a promise to give more can be good consideration

while a promise to accept less cannot. Lord Blackburn noted in Foakes v Beer 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…’ 37Other cases

like Re Selectmove Ltd38 too supported the decision that a promise to accept less is
32
Mindy Chen- Wishart, (n 3) 143-144 Glidewell LJ’s judgement in Williams v Roffey Bros
33
Williams v Roffey Bros (n 31) Lord Justice LJ
34
Glidewell LJ cited Ward v Byham [1956] 1 WLR 496,498 and Williams v Williams [1957]1 WLR 148,151 where
both cases had not defined what “practical benefit” meant
35
Mark A. Giancaspro, “For Your Consideration: Old Rules, Practical Benefit and a New Approach to Contractual
Variation”, (2014),<https://digital.library.adelaide.edu.au/dspace/bitstream/2440/84690/8/02whole.pdf> accessed
24 December 2015
36
Phang J.A in (n 25)
37
Foakes v Beer [1884] UKHL 1
38
[1993] EWCA Civ 8

13
not good consideration. However, the Supreme Court of New South Wales had

accepted a promise to accept less as good consideration 39 and modified the

elements for the test to establish “practical benefit”. Phang J.A. suggests that

“practical benefit” as consideration should be extended to ‘promises to take less’

rather than being limited to ‘promises to give more’. 40 This means that a “practical

benefit” will not only amount to consideration when parties in a contract make an

additional promise to give something extra, but also in promises where they agree to

accept less than what was initially promised. If UK were to extend the meaning of

“practical benefit”, it would need to be made by the House of Lords or ‘more

41
appropriately, by Parliament after consideration by the Law Commission’. There

are also other problems with practical benefit such as the ‘moral hazards’ as

explained by Giancaspro.42 Thus, the concept of practical benefit is very versatile

and if courts do not limit it, the lines between gratuitous and enforceable promises

would be eroded.

Promissory estoppel could be used in replacement of consideration to avoid

the problems arising from the concept of “practical benefit”. The purpose of

promissory estoppel is to “prevent an unjust departure by one person from an

assumption adopted by another on the basis of some act or omission which, unless

the assumption be adhered to, would operate to that other’s detriment” 43 and thus in

a variation of a unilateral contract where performance of an existing legal duty is

unenforceable, promissory estoppel may be able to supply an alternative method to

39
Musumeci v Winadell Pty Ltd [1995] 34 NSWLR 723 In this case, Williams v Roffey Bros was applied by
Santow J as he found no distinction between the ‘same for more’ and ‘less for same’ modifications
40
Phang J.A (n 36)
41
Mindy Chen-Wishart (n 3) 150
42
Mark A. Giancaspro, “For Your Consideration: Old Rules, Practical Benefit and a New Approach to Contractual
Variation”, (2014), 162 <https://digital.library.adelaide.edu.au/dspace/bitstream/2440/84690/8/02whole.pdf>
accessed 24 December 2015
43
Thompson v Palmer [1993] 49 CLR 507,547 (Dixon J)

14
enforce the promise.44 This being said, by using promissory estoppel instead, a

promise to accept less can also be enforced and as such overcomes the problem

with the limitations of practical benefits. For an example in Collier v P & MJ Wright

(Holdings) Ltd45 , though the courts acknowledged that the agreement to accept part

payment of a debt was not enforceable 46, they considered the appellant’s submission

regarding using promissory estoppel to enforce the promise. Although there was a

pre-existing duty, the fact that the defendants had agreed to accept part payment of

the debt, which then led to reliance upon that promise makes the promise

enforceable.47 Similarly in Williams v Roffey Bros, the courts could have used

promissory estoppel but did not for two main reasons, one of them being that it was

not raised during trial.48 Secondly, the doctrine was rejected because of the

underdevelopment of the doctrine to contract modification scenarios. 49 Following the

precedent in Central London Property Trust v High Trees House Ltd 50,

promissory estoppel cannot be used as a cause of action and as such, it may not be

a solve the problem in consideration; unless the UK courts were to follow Australian

courts in allowing promissory estoppel to be used as a cause of action too.

In Waltons v Maher, Waltons were estopped from going back on their

promise to the Maher. The judges of this case had unanimously allowed promissory

estoppel to be used as a cause of action as there was a detrimental reliance

44
Je Maintiendrai Pty Ltd v Quaglia [1980] 26 SASR 101
45
[2008] 1 WLR 643
46
Pinnel’s Case [1602] 5 Rep 117
47
This was decided and explained by Lady Justice Arden that “The facts of this case demonstrate that, if (1) a
debtor offers to pay part only of the amount he owes; (2) the creditor voluntarily accepts that offer, and (3) in
reliance on the creditor’s acceptance the debtor pays that part of the amount he owes in full, the creditor will, by
virtue of the doctrine of promissory estoppel, be bound to accept that sum in full and final satisfaction of the
whole debt. For him to resile will of itself be inequitable. In addition, in these circumstances, the promissory
estoppel has the effect of extinguishing the creditor’s right to the balance of the debt”
48
This was mentioned by Lord Justice Russel in his judgement whereby he mentioned that “He would have
welcomed the development of [this line of] argument, if it could have been properly raised during the trial”
49
Syros Shipping Co SA v Elaghill Trading Co [1980] 2 Lloyd’s Rep 390 Glidewell LJ cited this case in his
judgement as in this case, it was held that the owners were suing based on a “naked promise” and were using
estoppel as a cause of action and not as a shield
50
n7

15
suffered. Maher had adopted an assumption that the contract was sure to be made

based on Walton’s failure to reply promptly and that they had remained silent when

they were aware that Maher had started performing the contract terms. As such, the

performance of work by Maher would cause them to suffer detriments if Waltons

were to go back on the promise, which they did later on. Hence, it is seen that the

decision to allow Maher to rely on promissory estoppel was fair to them although it

was used as a sword, not a shield. This was also accepted in other jurisdictions like
51
New Zealand and Canada. However, if UK courts were to follow suit with this

development and replace consideration, the Court of Appeal in Baird Textile

Holdings Ltd v Marks and Spencer plc 52 held that it would be up to House of Lords

to do so. Nevertheless, there are arguments against the adoption of promissory

estoppel in replacement of consideration.

Elizabeth Cooke argued that UK courts should not adopt a reliance based

approach towards relief like Australia 53 and listed reasons to support her argument.

Firstly, she argued that adopting a reliance approach towards relief would cause

more confusion and weaken estoppel as a whole. However, it was rebutted that

adoption of promissory estoppel would be more coherent as the High Court of

Australia gave clear guidelines to use equitable estoppel as a remedy thus solving

the previous problems in estoppel. 54 She also argues that the reliance based theory

is inconsistent with restitution law as courts may grant restitutionary remedies

sometimes. This was rebutted again as Australia’s jurisdictions had mentioned that

they would only do so in rare occasions when restitution interest coincides with

51
Burbery Mortgage Finance and Savings Ltd v Hindsbank Holdings Ltd [1989] 1 NZLR 356 ; Gilbert Steel Ltd v
University Construction Ltd [1973] 36 DLR (3d) 496
52
[2001] EWCA 274
53
E Cooke, “ Estoppel and the Protection of Expectations” [1997] 17 LS 258
54
Andrew Robertson, “Reliance and Expectation in Estoppel Remedies” [1998] 18 LS 360 Here, Robertson
provided that Australian courts had distinguishing the purpose of estoppel which is to protect reliance loss, not
expectation loss

16
reliance interest. But cases like these are rare and as such, should not be a worry for

UK courts. She continues to argue that the law of contract is ‘flexible enough to

cover reliance which has not been bargained for…’ 55 and that an expectation remedy

should be used to remedy breach of promises that are relied upon. However,

Robertson stated that equity is wider than contract and that expectation damages

may not apply in relied- upon promises as courts intervene in such promises to

prevent harm resulting from a reliance on other’s conducts and thus, reliance based

approach should be adopted.56 There is also fear of inconsistency with previous

decisions where claimants had difficulty in proving value of reliance but Australian

courts have proven contrary to this issue.57 As such, using promissory estoppel could

be better than consideration in enforcing promises.

Conclusively, UK courts should limit the scope of consideration and widen that

of promissory estoppel to balance out the pros and cons in both doctrines

respectively. Whether or not they should follow Australia and replace consideration

completely is a largely debatable matter whereby the decision must me slowly

brought about and not rushed through. Hence, gradual steps to remedy the issues of

consideration should be taken while the doctrine of promissory estoppel should be

increasingly adopted at a reasonable pace in order to see the full effects on whether

the promissory estoppel is a better alternative to consideration.

Bibliography
55
Ibid 52,
56
P Parkinson, “Equitable Estoppel: Developments after Walton Stores (Interstate) Ltd v Maher” [1990] 3 J
Contract Law, 50,59; P D Finn ‘ “Equity and Contract” in P D Finn (ed) Essays on Contract’ (Sydney, Law Book
Co, 1987) as cited by Robertson p.365
57
Commonwealth v Verwayen [1990] HCA 39 In this case, Australian courts used the approach that they are not
only required protecting reliance loss, but also needing to provide a remedy which is minimally needed to prevent
detrimental reliance. This will not affect the result in most cases, only in those where the value of claimant’s
expectations is disproportionate to their reliance loss

17
Textbooks
1. Burrows A, A Casebook on Contract (4th edn, Hart Publishing 2013)

2. McKendrick E, Contract Law-Text, Cases, and Materials (4th edn, Oxford

University Press 2010)

3. N.Adams J and Brownsword R, Understanding Contract Law (5th edn, Sweet and

Maxwell 2007)

4. Smith JC, Smith & Thomas: A Casebook on Contract (11th edn, Sweet &

Maxwell 2000)

5. Stone R, The Modern Law of Contract (11th edn, Routledge 2015)

6. Treitel GH, An Outline of the Law of Contract (5th edn, Butterworths 1995)

7. Wishart M-C, Contract Law (3rd edn, Oxford University Press 2010)

Cases

1. Antons Trawling Co v Smith [2003] 2 NZLR 23

2. Baird Textile Holdings Ltd v Marks and Spencer plc [2001] EWCA 274

3. Burbery Mortgage Finance and Savings Ltd v Hindsbank Holdings Ltd [1989] 1

NZLR 356

4. Central London Property Trust v High Trees House [1947] 1 KB 130

5. Chappell & Co v Nestle Co Ltd [1960] AC 87

6. Collier v P & MJ Wright (Holdings) Ltd [2008] 1 WLR 43

7. Combe v Combe [1951] 2 KB 215

8. Commonwealth v Verwayen [1990] HCA 39

9. Currie v Misa [1875] LR 10 Ex 153

10. D & C Builders v Rees [1966] 2 QB 617

11. Foakes v Beer [1884] UKHL 1

18
12. Gay Choon Ing v Loh Sze Ti Terence Peter [2009] 2 S.L.R 332 (CA)

13. Gilbert Steel Ltd v University Construction Ltd [1973] 36 DLR (3d) 496

14. Hughes v Metropolitan Railway [1877] 2 AC 439

15. Je Maintiendrai Pty Ltd v Quaglia [1980] 26 SASR 101

16. Jones v Padavatton [1979] 1 WLR 328

17. Musumeci v Winadell Pty Ltd [1998] 34 NSWLR 723

18. New Zealand Shipping Co Ltd v AM Satterhwaite & Co Ltd [1975] AC 154

19. Pao on v Lau Yiu Long [1979] 3 All ER 65 Privy Council

20. Pinnel’s Case [1602] 5 Rep 117

21. Re Selectmove Ltd [1993] EWCA Civ 8

22. Stilk v Myrick [1809] 170 ER 1168

23. Syros Shipping Co SA v Elaghill Trading Co [1980] 2 Lloyd’s Rep 390

24. Thompson v Palmer [1993] 49 CLR 507,547

25. Tweddle v Atkinson [1861] EWHC QB J57

26. Waltons Stores (Interstate) Ltd v Maher [1998] 164 C.L.R 387 (H.C.A)

27. Ward v Byham [1956] 1 WLR 496

28. Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1

29. Williams v Williams [1957] 1 WLR 148

30. Woodhouse AC Israel Cocoa SA v Nigerian Produce Marketing Co Ltd [1972] AC

941

Articles and Online Journals

19
1. Atiyah PS, Essays on Contract (Clarendon Press Oxford)
2. Cartwright J, ‘Protecting Legitimate Expectations and Estoppel in English Law’

<http://www.ejcl.org/103/art103-6.pdf> accessed 24 December 2015

3. Chen-Wishart M, ‘Consideration: Practical Benefit and the Emperor’s New

Clothes’ [1997] Good Faith and Fault in Contract Law 123

4. Chen–Wishart M, ‘In Defence of Consideration’ (2013) 13 Oxford University

Commonwealth Law Journal 209

5. Coote B, ‘Consideration and Benefit in Fact and in Law’ (1990) 3 Journal of

Contract Law

6. Giancaspro MA, ‘For Your Consideration: Old Rules, Practical Benefit and A New

Approach to Contractual Variation’

<https://digital.library.adelaide.edu.au/dspace/bitstream/2440/84690/8/02whole.p

df> accessed 24 December 2015

7. Lunney M, ‘Towards a Unified Estoppel-The Long and Winding Road’ [1992]

Conv 239-251

8. Robertson A, ‘Reliance and Expectation in Estoppel Remedies’ (1998) 18 Legal

Stud 360

9. Wishart MC, ‘Consideration and Serious Intention’ [2009] SSRN Electric Journal

10. Wishart MC, ‘A Bird in the Hand: Consideration and One-Sided Contract

Modifications’

<https://www.academia.edu/949060/A_Bird_in_the_Hand_Consideration_and_O

ne-Sided_Contract_Modifications> accessed 24 December 2015

11. Yan NC and Dennis, ‘Does the Doctrine of Promissory Estoppel Alleviate the

Unfair Effect of Consideration?’

<https://www.academia.edu/2301115/Does_the_Doctrine_of_Promissory_Estopp

el_Alleviate_the_Unfair_Effect_of_Consideration> accessed 24 December 2015

20
12. EQUITABLE ESTOPPEL’ (2009)

<http://sydney.edu.au/lec/subjects/equity/materials%20SUMMER%202009-

10/Radan%20&%20Stewart%20Ch%2012.pdf> accessed 24 December 2015

List of References

Textbooks

21
1. McKendrick E, Contract Law-Text, Cases, and Materials (4th edn, Oxford

University Press 2010)

2. N. Adams J and Brownsword R, Understanding Contract Law (5th edn, Sweet

and Maxwell 2007)

3. Treitel GH, An Outline of the Law of Contract (5th edn, Butterworths 1995)

4. Wishart M-C, Contract Law (3rd edn, Oxford University Press 2010)

Cases

1. Antons Trawling Co v Smith [2003] 2 NZLR 23

2. Baird Textile Holdings Ltd v Marks and Spencer plc [2001] EWCA 274

3. Burbery Mortgage Finance and Savings Ltd v Hindsbank Holdings Ltd [1989] 1

NZLR 356

4. Central London Property Trust v High Trees House [1947] 1 KB 130

5. Chappell & Co v Nestle Co Ltd [1960] AC 87

6. Collier v P & MJ Wright (Holdings) Ltd [2008] 1 WLR 43

7. Combe v Combe [1951] 2 KB 215

8. Commonwealth v Verwayen [1990] HCA 39

9. Currie v Misa [1875] LR 10 Ex 153

10. D & C Builders v Rees [1966] 2 QB 617

11. Foakes v Beer [1884] UKHL 1

12. Gay Choon Ing v Loh Sze Ti Terence Peter [2009] 2 S.L.R 332 (CA)

13. Gilbert Steel Ltd v University Construction Ltd [1973] 36 DLR (3d) 496

14. Hughes v Metropolitan Railway [1877] 2 AC 439

15. Je Maintiendrai Pty Ltd v Quaglia [1980] 26 SASR 101

16. Jones v Padavatton [1979] 1 WLR 328

17. Musumeci v Winadell Pty Ltd [1998] 34 NSWLR 723

22
18. New Zealand Shipping Co Ltd v AM Satterhwaite & Co Ltd [1975] AC 154

19. Pao on v Lau Yiu Long [1979] 3 All ER 65 Privy Council

20. Pinnel’s Case [1602] 5 Rep 117

21. Re Selectmove Ltd [1993] EWCA Civ 8

22. Stilk v Myrick [1809] 170 ER 1168

23. Syros Shipping Co SA v Elaghill Trading Co [1980] 2 Lloyd’s Rep 390

24. Thompson v Palmer [1993] 49 CLR 507,547

25. Tweddle v Atkinson [1861] EWHC QB J57

26. Waltons Stores (Interstate) Ltd v Maher [1998] 164 C.L.R 387 (H.C.A)

27. Ward v Byham [1956] 1 WLR 496

28. Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1

29. Williams v Williams [1957] 1 WLR 148

30. Woodhouse AC Israel Cocoa SA v Nigerian Produce Marketing Co Ltd [1972] AC

941

Articles and Online Journals

1. Atiyah PS, Essays on Contract (Clarendon Press Oxford)

2. Chen-Wishart M, ‘Consideration: Practical Benefit and the Emperor’s New

Clothes’ [1997] Good Faith and Fault in Contract Law 123

3. Giancaspro MA, ‘For Your Consideration: Old Rules, Practical Benefit and A New

Approach to Contractual Variation’

<https://digital.library.adelaide.edu.au/dspace/bitstream/2440/84690/8/02whole.p

df> accessed 24 December 2015

4. Lunney M, ‘Towards a Unified Estoppel-The Long and Winding Road’ [1992]

Conv 239-251

5. Robertson A, ‘Reliance and Expectation in Estoppel Remedies’ (1998) 18 Legal

Stud 360

23
6. Yan NC and Dennis, ‘Does the Doctrine of Promissory Estoppel Alleviate the

Unfair Effect of Consideration?’

<https://www.academia.edu/2301115/Does_the_Doctrine_of_Promissory_Estopp

el_Alleviate_the_Unfair_Effect_of_Consideration> accessed 24 December 2015

7. EQUITABLE ESTOPPEL’ (2009)

<http://sydney.edu.au/lec/subjects/equity/materials%20SUMMER%202009-

10/Radan%20&%20Stewart%20Ch%2012.pdf> accessed 24 December 2015

24