Chapter 3 Guidance on answering the questions in the book

Enforceability: consideration, promissory estoppel, formalities

1. Ivan agrees to build an elaborate stage and 20 kiosks for Jo's concert on 1 January for £25,000. Progress is worryingly slow. Ivan informs Jo that this is due to a severe labour shortage. Jo agrees to (a) increase his payment to £40,000 to enable Ivan to attract workers; and (b) reduce the number of kiosks to 15. For extraneous reasons, the labour supply improves rapidly; Ivan attracts enough workers without paying more. Jo decides that she really will need all 20 kiosks. Is Jo entitled to 20 kiosks? How much must Jo pay?

See 3.1.5.3 ‘The same for more’: pre-existing contractual duty owed to the other party 3.1.5.4 Less for the same’: part-performance

3.1.5.5 The roles of consideration and promissory estoppel in modifications

3.2.1 The requirements of promissory estoppel

3.2.2 The types of promise subject to promissory estoppel.

Is Jo entitled to 20 kiosks?  This depends on whether Jo's promise to accept Ivan's part performance of 15 kiosks is enforceable.  Has Ivan given consideration for Jo's promise to pay more? Consider the application of practical benefit in the context of ‘less for the same’ contract modifications after MWB Business Exchange Centres Ltd v Rock Advertising.  Can Ivan appeal to promissory estoppel to prevent Jo from demanding the original 20 kiosks?  Apply its requirements to the facts, eg has there been reliance?  Is it inequitable for Jo to go back on her promise in view of the improved labour market?

How much must Jo pay?  Has Ivan given consideration for Jo's promise to pay more? Consider practical benefit in the context of ‘the same for more’ contract modifications. Does promissory estoppel apply here?

2. 'The presence of consideration is a sufficient but not a necessary reason for treating a promise as binding. The outer boundaries of consideration are uncertain.' Is this true? What other good reasons, if any, might there be?

 

See 3.1.1 The basic idea and its justification

3.1.3 The requirement of ‘value’ – 3.1.4 Pre-existing duties.

This question invites you to assess consideration from a normative and practical perspective.  The sub-questions you should address are:

  • What is the scope or definition of consideration?  Is the answer clear and internally consistent?  If not, why not?
  • What is the orthodox justification of the consideration requirement?  To what extent, if any, is this undermined by any uncertainty about the definition of consideration? Where might consideration be overly broad (or overly narrow) when measured against the orthodox justification? 
  • What other good reasons might there be for enforcing undertakings?  How are they manifested in the law? (e.g. serious intention (deeds); reliance (in the law on uncertainty, promissory estoppel); unjust enrichment (Butler Machine Tool, exception to the past consideration rule)). 
  • You could conclude with suggestions for reform of the consideration doctrine.

3. Advise the Law Commission whether reform of the consideration doctrine is necessary or desirable, outlining any suggestions you have for reform.

This question is similar to question 3.  Again, it invites you to assess the consideration doctrine but with an emphasis on reform options.  The sub-questions you should address are:

  • What is to be said in favour of the consideration doctrine?
  • What are the criticisms of the consideration doctrine?
  • To what extent have recent developments (e.g. MWB v Rock, Williams v. Roffey, the Contracts (Rights of Third Parties) Act 1999) weakened the consideration requirement?
  • What reasons for enforcing undertakings are manifest in the law, other than that of bargain (e.g. serious intention (deeds, privity); reliance (uncertainty, promissory estoppel); unjust enrichment (Butler Machine Tool, exception to the past consideration rule))?
  • How might these reasons for enforcement be addressed by reform of the consideration doctrine (see 3.1.6 Consideration: an assessment)?

4. 'It is vital that promissory estoppel remains a shield and not a sword to prevent it from outflanking the requirement of consideration.' Discuss.

See 3.2.2 The types of promise subject to promissory estoppel  – 3.2.3 Future of promissory estoppel.

This question invites you to address the relationship between the doctrines of consideration and promissory estoppel.  The sub-questions you should address are:

  • What does the reference to 'shield' and 'sword' mean?
  • What is the function of consideration in the terminology of 'shield' and 'sword'?
  • Compare consideration and promissory estoppel in terms of the reason for enforcement, their requirements and their remedies.  In view of the answers to these questions, is it true that allowing promissory estoppel to function as a sword would undermine consideration?
  • What is the relationship between consideration and promissory estoppel in the context of promises to perform pre-existing duties and to render part performance?
  • What is the impact of the Court of Appeal decision in Collier v Wright? Does it turn a shield into a sword?

5. What is the relationship between the doctrines of promissory estoppel and of consideration? What should it be?

This question is similar to question 4.