Promissory Estopple

The Law of Contract is an agreement between two parties or more. The keystone of many business transactions. For a contract to be enforceable, there are 4 elements must be present, which are Offer, Acceptance, Consideration & lastly Intention to Create Legal Relations. Consideration is an essential element for the formation of a legally binding agreement i.e. Contract.

In Currie v Misa (1875) consideration was defined as “……some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the others”. Consideration can be viewed as the price or compensation for the promise given by one party to another (Kaplan Business Law Study Guide & Lecture Note, Robin Peter Lange, Intake 7, Page 32). Consideration can take the form of an asset, the exchange of monies, or the promise to refrain from doing something. Regardless of the form of consideration required in a contract, a consideration is needed in order to make an agreement or promise legally enforceable (Cited : http://contract-laws.com/promissory 21 April 2012). For example – if X agrees to sell his computer to Y for $500, then consideration for selling the computer is $500. It may be a promise to perform a desired act or a promise to refrain from doing an act that one is legally entitled to do. For example – a promise to fix a leaking tap — or a promise not to do something, such as build a second story on a house that will block the neighbour’s view. Regardless of the type of consideration required in a contract, some key of consideration is generally required in order to make an agreement valid and legally enforceable.

When there is contractual relationship between parties, promissory estoppel occurs. Promissory estoppel relies on a promise and allows a party to recover on a promise even though that promise was made without consideration. Essentially it prevents, or stops a person from going back on...