Contract law Essay Example | Topics and Well Written Essays - 1750 words

Contract law - Essay Example 20,000 to be paid in instalments related to the work completed. The plaintiff got into financial difficulties because the price was too low and he did not supervise the work properly. He had received over 80 per cent of the price but still had far more than 20 per cent of the work to do. The defendants were liable to a penalty clause in the main contract if the work was not completed on time. They were aware of the plaintiff’s difficulties and that the price was too low. They met him and agreed to pay him an extra ?10,300 at ?575 per flat to ensure that he continued with the work and completed on time. The plaintiff completed eight further flats and received a payment of ?1,500. He stopped work and sued for the money he alleged to be owing. The defendants denied liability and, in particular, that they were liable to pay any part of the additional ?10,300 because their agreement to pay it was not supported by any consideration. The judge held that the plaintiff was entitled to eight payments of ?575, less certain deductions. The defendants appealed. â€Å"My understanding of the meaning of the requirement that ‘consideration must move from the promisee’ is that such consideration must be provided by the promise, or arise out of his contractual relationship with the promisor. It is consideration provided by somebody else, not a party to the contract, which does not ‘move from the promisee’†¦Ã¢â‚¬ ¦but it is, of course, not the situation in the present case. Here the benefits to the defendants arose out of their agreement of April 9, 1986 with the plaintiff, the promise.(Glidewell L.J in Williams v Roffey Bros.[1990]) The judge(Glidewell L.J) further concluded that:† I repeat, therefore, my opinion that the judge was, as a matter of law, entitled to hold that there was valid consideration to support the agreement under which the defendants promised to pay an additional ?10,300 at the rate of ?575 per flat. For these rea sons I would dismiss this appeal† In answering the question as to whether promissory estoppel could have been of raised or whether it could have added relevance to Williams v Roffey Brothers, the answer is no, because of the limitations on the doctrine of promissory estoppel. It may be of paramount importance to find the relationship between consideration and promissory estoppel. Consideration originated simply as an indication of the need for a reason for enforcing a promise or obligation, such as the fact that the promisee had given something to the promisor in expectation that the promise would be fulfilled(Atayah, 1986). The rigid set of rules requires that there must be benefit and detriment, that past consideration is no consideration; that consideration must be of economic value; and that gratuitous promises will not generally be enforced. The doctrine of promissory estoppel on the other hand, derives from Lord Denning’s decision in Central London Property Trust Ltd v High Trees Ltd[1947] KB 130. The doctrine gives rise to situations in which a contract can in effect be varied without there being consideration. The facts are that by a lease under seal made on September 24, 1937, the plaintiffs, Central London property Trusts Ltd, granted to the defendants High Trees House Ltd, a subsidiary of the plaintiff company, a tenancy of a block of flats for the term of 99 years from September 29, 1937, at a ground rent of ?2, 500 a year.