Promissory Estoppel Research Paper
“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
An estoppel is simply a method developed by the courts, which could prevent or estop a party from performing in a particular way when the other has relied upon the facts that were represented to him. There are several types of estoppel like proprietary estoppel, estoppel by representation of fact. However, in this essay our focus is on the promissory estoppel as it relates to the Law of Contract.
The courts initially created the doctrine of promissory estoppel in order to avoid
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common-law exception and equitable exception. In the common law exception, if the debtor provides some sort of benefits (consideration) and the creditors agreed, this can be one of the exceptions for the general rule of party payment of debts. The part payment from third party would be a valid consideration as it would be a fraud on the third party if the courts allow the moneylender’s to claim. Another exception is the composition agreements. This is an agreement between debtor and a group of creditors, under which the creditors agree to accept a percentage of their debts in full settlement. If the court let the individual creditor to claim the balance it would amount to a fraud on the other creditors who had all agreed to the acceptance of part of the debts as a full settlement. In another category, which is the equitable exception, promissory estoppel is the doctrine that used to against the general rule of the part payment of debts. This doctrine would be discussed in the following
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