Introduction
Over the period of time, the judiciary has evolved tests in order to enforce mutual obligations and intention of parties to a contract. One such test is the doctrine of consideration, which has gone through significant challenges and has survived cycles of criticism because of its inconsistent and inflexible nature. The other test is that of the doctrine of promissory estoppels, which comes into effect where a contract does not allegedly have sufficient consideration and enforceability of the contract is in doubt. Sir Frederick Pollock defined consideration as “An act of forbearance of one party, or promise thereof, is the price for which the promise of other is bought, and the promise thus given for value is enforceable.” Consideration is considered to be one of the essential elements of the binding agreement. At the same time, the concept of consideration has also come to be criticised on the grounds that it is rigid and does not answer to situations where they may be legally enforceable obligations even in the absence of consideration. This is seen in the context of promissory estoppel, as explained by Lord Denning in Central London Property Trust Ltd v High Trees House Ltd, that “a promise intended to be binding, intended to be acted upon, and in fact acted upon, is binding in so far as its terms properly apply.” For students struggling with all these concepts, seeking a law dissertation help provide the most valuable insights into navigating the complexities of contract law.
This essay attempts to present the rigidity and inflexibility of the doctrine of consideration in the light of the development of equitable doctrine of promissory estoppel by the courts. It also lays down viewpoints that totally undermine the value of its existence. On a separate note, one can say that the development of common law has reduced the challenges of rigidity of the doctrine thereby enabling its movement towards the principle of a quid pro quo. The doctrine of consideration has attained more recognition and relevance to current laws and rules.
Consideration and Promissory Estoppel
A rather highly criticised requirement of a valid contract is the existence of consideration. The functionality and purpose of this requirement has caused many to ask of its importance, to
Promissory estoppel can be said to fill in the gaps left by the limitations of consideration. The basis for such thought process could be twofold: From 1809 to 1991, common law provided that a promise by a party to perform an act that he or she is already legally bound to perform is not good consideration. Later, doubts were being raised that doctrine of consideration ceases to perform a useful role and does not meet the needs of commerce. Subsequently, suggestions were raised that promises with satisfactory evidence modifying an existing contract should be enforceable. Having observed this, one can conclude that consideration hinders legal effects rather than furthering protection of rights and liabilities. Being
One can strongly criticise the element of flexibility that promissory estoppel carry with it. As stated, promissory estoppel is discretionary nature, courts interpret and apply it ad hoc to cases depending on situation to situation. If one comes to think of it, chances of stretching the application and creating inconsistency is too high to handle. This may lead to levels of controversies where deviating principles are laid down in courts and in the guise of using this discretionary power, courts may end up granting remedies lesser than they would have if consideration was in place. This was laid down in Central London Property Trust Ltd v High Trees Ltd. Nonetheless, screening through the development from the past until the present, use of promissory estoppel to enforce contract creates a double impact. The first purpose is that it protects parties in lesser bargaining power from being exploited. This could not have happened in cases where there is a strict rule of consideration being mandatorily applied in a contract. The second purpose is deduced from the suspensive nature of the doctrine of promissory estoppel. As held by the Privy Council in Ajayi v R T Briscoe, a mere promise will
The series of events discussed above leads to conclusive thought process about consideration giving way to promissory estoppel in bringing justice to the parties of a contract and it takes a secondary role by supplementing the latter in enforcing rights and liabilities of the parties. However, one cannot ignore the fact that in modern times, a contract without a consideration may lead to failure of contractual claims arising out of a dispute between the parties. Consideration, if sufficient, can ease legal headaches in complex cases or contracts that are mostly electronically conducted. But, on the other hand, consideration proves to be difficult to enforce than the clearly defined requirement of promissory estoppel. Nevertheless, it is laid down in a famous contract law case, Combe v Combe, that promissory estoppel could be used only as a defence and not as a cause of action, and as laid down in Baird Textiles v Marks & Spencer plc, it is for the court to interpret and rule that promissory estoppel operates as a sword, and not just a shield.
Contract still needs consideration as one of its essential elements for its enforcement despite criticism related to it of being historically rigid and resistant to change. With the change in contractual obligations and the pace with which business dealings are electronically created and sealed in current time, alterations need to be made to this doctrine to arrive at a clearer and concrete understanding. This will enable the legal and judicial system to make its enforcement a possibility in the area of law of contract.
However rigid the courts have been in the process of developing rules of consideration, the degree of involvement and alteration made in order to scrub difficulties attached to promissory estoppel need also to be similarly applied in the modification of the doctrine of consideration. In the ever changing social, geographical, and economic conditions, it is already seen that judiciary and legislature adopt a flexible approach in time of need and have always deviated or
Conclusion
The doctrine of consideration has been criticised as being too narrow in scope to be able to give legal effect to promises in a contract. Therefore, some sections of the legal fraternity have suggested the use of doctrine of promissory estoppel in cases where an alternative remedy is needed for the enforcement of contract. On the other hand, the doctrine of promissory estoppel is subject to the criticism that it is too flexible and discretionary in nature and therefore, it is unable to provide a stable remedy.
An examination of the different viewpoints shows that even though promissory estoppel does provide a good alternative, consideration remains one of its essential elements for the enforcement of contract. However, for consideration to remain relevant and concomitant with the changing needs of the society, there is a need for judiciary to adopt a more flexible approach towards consideration. With the change in contractual obligations and the pace with which business dealings are electronically created and sealed in current time, alterations need to be made to this doctrine to arrive at a clearer and concrete understanding. Courts have shown a lot of flexibility with regard to the doctrine of promissory estoppel. Now the same flexibility needs to be applied to consideration as well.
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