LAWS104 Lecture Notes - Lecture 3: Estoppel
27 May 2018
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i. CONSIDERATION
- It moves from the promise – exchange of something of value; price paid for a
promise and must be present in every simple contract.
- There must be:
o Benefit – property, services, etc (getting money, car, buying a house) Currie v
Misa
o Detriment – giving up something (paying someone, selling car) Currie v Misa
o A promise – can also constitute consideration, a promise to not do something
can also be good consideration
- Gratuitous promises and Deeds:
o Deeds can enforce them, a solemn and binding promise
o Consideration will not be necessary
o Must comply with formal written requirements
o Only damages are available for breach of deed
o Strategic evidentiary advantages
- Equity will not enforce a deed
- You have 6 years to sue from moment of breach – 12 years if in a deed, it reflects the
solidity of the agreement
- Past consideration is not good consideration (Roscorla v Thomas)
- Promise to perform an existing contractual duty is not sufficient consideration
- Performing a public duty is not good consideration
- Performing a legal obligation is not good consideration (Foakes v Beer)
- Existing contractual duty is not good consideration
- Part payment is not good consideration
- Compromise of a claim or forbearance to sue – this can be sufficient consideration as
you are giving up a claim and/or the right to sue
- Executed consideration -> promise to pay for a service after that service has been
performed (reward for missing dog, you get the reward after finding and returning
the dog)
- Joint Promisees
o Coulls v Bagot’s Executor and Trustee Co (1967) -> if the wife was a party to
the contract, and specified as a joint-Promisee, then the consideration her
husband has given would apply to her too.
o With joint promisees, only one party needs to provide consideration
- Bargains and Conditional Gifts
o Australian Woollen Mills Pty Ltd v Commonwealth
o Difference between act performed in reliance on a promise, rather than as
the agreed price for a promise.
o An act performed in reliance is not consideration – but can give rise to
estoppel (Beaton v McDivitt.
- Australian Woollen Mills Pty Ltd v Commonwealth (conditional gifts) -> HCA
decision. The Commonwealth Government announced a subsidy would be paid to
manufacturers of wool who purchased it for local manufacture. Woollen Mills
purchased the will and received some payments – then, the government stopped
this, and Woollen Mills sued.
Issue: as the purhase of ool i osideratio of the goerets supposed
promise?
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Law: there must be a form of exchange and there was not. The purchase of wool was
not in reliance of the susidys they eeded it ayoe, hih is ot good
consideration. The government also did not have intention to be legally bound as it
was a scheme to promote industry.
Conclusion: they were always going to buy the wool, it was not in reliance of the
scheme, it benefited Woollen Mills.
- Beaton v McDivitt -> McDivitt promised to transfer a portion of his land to Beaton
when proposed rezoning occurred if, in the meantime, Beaton would work on the
land as specified. Beaton moved onto the land and worked (building house). Seven
years later there was a dispute -> Beaton ordered off land.
Issue: was the contract supported by consideration?
Law: For there to be consideration, there must be a bargain between the parties.
Held: Beaton can seek remedy in estoppel only. No consideration provided by
Beaton in return for the promise by McDivitt to transfer the land – no detriment to
Beaton (living on land for free).
- Roscorla v Thomas -> 1842. Plaintiff purchased a horse from Defendant. D then
promised after that the horse as soud ad free fro ie. The horse as atually
quite vicious, and Plaintiff sued for breach of contract.
Issue: was the precedent executed consideration of purchasing the horse enough to
support the subsequent promise?
Law: past consideration is not good consideration – it must be given to the actual
promise and must be contemporaneous with the contract.
Application: the promise that the horse was healthy was not enforceable because
there was no consideration with it, he had already bought the horse.
- Foakes v Beer -> House of Lords. Beer obtained judgment against Foakes for a debt
owed and costs. Over a year later the parties entered into an agreement, in
consideration of Foakes paying Beer $500 in part satisfaction of the judgement debt
and on condition that the balance will be paid in instalments, Beer would not take
proceedings on the judgement. 1882 Beer took action against Foakes to enforce the
judgement and receive the interest on the judgement debt.
Issue: was the communication of the agreement capable of being enforced?
Law: part payment is not sufficient consideration
Application: part payment not sufficient to relieve from whole debt. Court found for
Beer as the undertaking of existing obligation to do something does not constitute
good consideration. Foakes already agreed to pay the entire debt.
- William v Roffey Bros and Nicholls (Contractors) [1991] -> Plaintiff was a carpenter
for Defendant. During the project P had suffered financial difficulties, D agreed to
pay additional bonus, to be paid on completion of the apartments. Plaintiff did not
receive it.
Issue: was the promise to pay the additional $10,300 have sufficient consideration?
Law: abandonment of contract by both parties can constitute good consideration
where one party promises to pay more, and if there is no economic duress.
Application: the promise to perform on time was a benefit to the defendant, and
therefore has a practical benefit, so the promise is binding.
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find more resources at oneclass.com
Document Summary
It moves from the promise exchange of something of value; price paid for a promise and must be present in every simple contract. There must be: benefit property, services, etc (getting money, car, buying a house) currie v. Misa: detriment giving up something (paying someone, selling car) currie v misa, a promise can also constitute consideration, a promise to not do something can also be good consideration. Gratuitous promises and deeds: deeds can enforce them, a solemn and binding promise, consideration will not be necessary, must comply with formal written requirements, only damages are available for breach of deed, strategic evidentiary advantages. You have 6 years to sue from moment of breach 12 years if in a deed, it reflects the solidity of the agreement. Past consideration is not good consideration (roscorla v thomas) Promise to perform an existing contractual duty is not sufficient consideration. Performing a public duty is not good consideration.
