Contract Law: Promissory Estoppel & Practical Benefits

This assignment delves into the complexities of Australian contract law, specifically focusing on two key concepts: promissory estoppel and practical benefits. It requires students to critically analyze several landmark cases, including *MWB Business Exchange Centres Ltd* and *Foakes v Beer*, outlining the legal arguments presented and their implications for contract formation. The analysis also draws upon scholarly works and academic journals to provide a comprehensive understanding of these legal principles.

Business Law

Table of Contents
INTRODUCTION...........................................................................................................................1
QUESTION 1...................................................................................................................................1
QUESTION 2...................................................................................................................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Contract is considered as the written or spoken agreement which is especially concerned
and tended to be enforceable by law. It involves different parties who are liable to carry out the
contract. Here different case examples are stated that results in applying legal regulations to form
a legal contract between the parties.
QUESTION 1
As per the given case, binding agreement with Sam as they agree to put it in writing. Sam
is an honest purchaser of painting and admires a painting of sunflowers prepared by Josie. He
intended to buy the paintaing for $700, while, Josie replies that she will not accept less than $
800 for the the painting. After that, another buyer turned to purchase the painting who is an art
enthysiast, Wendy and impressed by the same painting and willing to pay $900 and Josie sells
the painting to her1. There was a binding agreement with Sam and both the parties are legally
binded and enforceable by law. While, at the ground of dispute among the parties the agreement
seems to be broken before the court of law. Hence, it is essential to provide crucial decision
regarding breach of contract so that appropriate decision could be made regarding binding of
contract. 4 crucial elements of contract which are as follows-
 Offer- It assesses that offer is considered as the term which is being provided by one
person to another. For instance, it is essential for both the parties to form a particular time
frame so that at that specific time offer is being made. However, offer does not include
requests of proposal, estimation or intent of letter etc. Also, it is considered that offer
lapses if it is not accepted upon time.
 Acceptance- It is another term that assesses that acceptance is considered as the term
when the party accepts the offer being made to them. It involves certain terms and
conditions so that contract is being carried out. For instance, if any new term is
introduced just prior to the agreement then it is considered as counter offer which is not
essential to be accepted. It would occur very few times just earlier the contract is being
accepted or rejected2. Also, it is not relevant that the person who is making final offer
1 Martin, P., “Estoppel: Binding promise without a contract: Court of appeal considers
proprietary estoppel”. (2016) LSJ: Law Society of NSW Journal, (23), pp.93.
2 Duffy, S. and Duffy, J., “An analysis of dispute review boards and settlement mediation
as used in the Australian construction industry”. (2014) Building and Construction Law
Journal, 30(3), pp.165-174.
1

accepts the proposal which would result in bringing irrelevant who makes the actual final
offer and thus acceptance of the proposal which would result into bringing negotiation
within contract. Acceptance could be given in writing, verbal or inferred through actions.
Thus, all such ways showcases acceptance and thus conform to the method accepted in
order to form legal contract.
 Intention of legal relations- It is another term that helps in formulating the contract in
regard to intend parties to enter into the legal contract. Thus, it is the duty of the parties to
assess that they are obliged in regard to formulate the contract as per the law. It is
essential for both the parties entering into the contract to have intention to create legal
relationship so that they are able to formulate effective rules and policies in terms of
following the rules and regulations. Also, it could be assessed that if all the parties are
focused upon carrying out the contract then they are bound in legal relationship so that
desired results could be attained. The contract is required to form legal contract and thus
stated that in the contract they are legally enforceable by law.
 Consideration- It is considered as the term that helps in binding parties to enter into the
contract and form legal relations. Thus, setting certain consideration helps in promising
the parties to provide them value in terms of asset or money. However, if any contract
does not have any consideration than it is considered as invalid contract. Therefore, it is
considered as trust among parties to carry out the agreement. Hence, it helps in satisfying
the needs of parties and refrain them to carry out the activities.
 Terms and conditions- It is stated that terms and conditions are considered as crucial part
for any contract. However, if there is no terms and conditions available within the
contract than it would impact upon the agreement. Also, it needs to be recognised that
each and every court gives unique decision and thus involve different terms and
conditions if the case is disputed contract and then carry out the agreement.
 Breach of contract- It could be assessed that this situation happens when any one of the
party in the contract fails to achieve the objectives as per the specified terms and
conditions. While, violation of the contract need to be identified at the time of carrying
out the contract and thus focus upon the work being carried out by one party. However, at
this time it is being placed in the hands of law and thus assess at the time of forming the
agreement and damages could be overcome from the parties.
2

As per the case, it could be evaluated that Josie is involved in a binding contract with
Sam and thus it is legally enforceable contract binded among each other so that legal
consideration could be given. A contract had been formed either if it is written or in oral form.
Here, the legal application is being carried out which is in terms of forming legal relationship
between the parties. It involves several types of remedies at the time of breach of agreement so
that it could impact the damages and restitution in the contract3. Damages that could be awarded
such as compensatory damages, that are stated as actual damages, which affects the parties at the
time of making good or replace the loss caused by the breach. Damages need to be provided to
the party involved in the contract so that it do not impact upon the same.
QUESTION 2
Here, as per the given statement of Pinnel's case it assesses that providing payment of less
amount does not provide satisfaction to the parties of full amount. Hence, consideration is the
term that provides certain rules in regard to promise to accept less as compared to full amount of
debt. Thus, it does not carried out within the law. Also, part payment of debt does not make any
different from the whole debt even of the other party agrees upon the same. With the help of
present case, it could be carried out that with the help of probability to identify the establishing
of such principle helps in carrying out one individual that owes money to another individual and
thus also make agreement in regard to settle the debt4. Also, it is considered that the main reason
which does not rests with the fact that there is no new consideration that helps in supporting the
contract formed within two parties. Moreover, Cole owned that Pinnel possess 8 10s but at the
request of Pinnel they said that Pound 5 2s 6d at the duration of one month before the full
amount was due. However, Cole also claimed that there was an agreement that the part payment
helps in discharging to go to full debt. Thus, with the court it assesses that Pinnel rule assesses
that part payment of original debt does not make the agreement for fresh consideration. Thus,
such type of agreement was not considered as contract. Thus, such type of case was generally
3 Corones, S., “Australian Competition and Consumer Commission v. TPG Interney Pty
Ltd., Forrest v. Australian Securities and Investments Commission: Misleading Conduct Arising
from Public Statements: Establishing the Knowledge Base of the Target Audience”. (2014)
Melb. UL Rev., 38, p.281.
4 Roberts, M., “MWB Business Exchange Centres Ltd: The Practical Benefit Doctrine
Marches On”. (2017) The Modern Law Review, 80(2), pp.339-351,
3

decided upon technicality. For instance, it has been assessed that if the Cole has been removed
from the Pinnel's case it helps in forming an contract which assesses the early payment was made
in return for accepting the part payment and thus it results in winning the case by Cole. Further,
it also assesses that if the part payment of debt would result in more acceptable to creditor than
the ability to recover the whole damages. Hence, it is stated that principle of Pinnel's case make
crucial judgement to follow the rules so that success could be attained5.
As per the claimant who is liable to pay full amount even if they are agreed to pay less
amount. Then, it has been considered that part payment of debt is not at all considered that valid
for the promise of providing part payment upon the request. It is essential to identify that the
payment is made either before the due date or with the different destination so that desired results
could be attained. The rule which says that promise to pay part of a debt or the payment of part
cannot be consideration for a discharge of the whole debt which is considered as the greatest of
common law. However, such rule is often considered as rule of Pinnel's case. Thus, as per the
given case, it could be assessed that whether the payment of part of a debt could result in
satisfaction of the whole debt where only part of the payment could constitute satisfaction of the
whole debt where part had been accepted by the creditor upon that understanding. Thus, such
type of law constitutes that providing consideration for a promise to give a full discharge and
thus carry out the legal duty. Thus, as per Pinnel's case it expresses that requirement for
consideration is needed within simple contracts so that such rule can be carried out in order to
enhance the present condition of Pinnel's case. As per the facts it could be considered that
according to the action of debt it assesses that sum of Pound 8 10s helps in considering that
defendant Cole argues regarding the case of Pinnel's request about Pound 5 2s 6d before the
whole debt was due. Thus, here, plaintiff party is required to accept the whole amount in full
satisfaction for the debt. Thus, it can be evaluated from the case that at the time of paying lesser
sum of debt in regard to satisfy the whole debt helps in appearing to the judges so that there
could not be any possibility that lesser sum could be satisfactory and thus here plaintiff for a
greater sum requires providing more benefit to the plaintiff than the money. Thus, such
5 Thampapillai, D., “Practical Benefits and Promises to pay Lesser Sums: Reconsidering
the Relationship between the Rule in Foakes v Beer and the Rule in Williams v Roffey. “ (2015)
U. Queensland LJ, 34, p.301.
4

judgement has been provided for the plaintiff in relation to provide payment so that best results
could be attained6.
The rule of Pinnel's case and how it impacts upon the doctrine of consideration. Further,
such also examines that the problems that has been arising from such rule is considered as the
Promissory Estoppel and it could be solved effectively from such rule. Contract is considered as
the agreement that the law will enforce a promise that is legally enforceable contract. It also
assesses that different rules are being carried out as per the Pinnel's case. Such rule states that
payment of less than individual owe will not totally discharge their debt obligation7. Hence, it is
because they are not liable to sue the party for balance therefore, it is the promise that is being
made by the creditor. It is essential to overcome the liability from applying such rule and thus it
could be assessed that in such law it is being carried out as per Pinnel's case (1602) 77 ER 2378.
CONCLUSION
It can be concluded from the study that contract needs to be made between two or more
parties in relation to create legal relationship. Thus, different cases are being addressed in
relation to provide effective outcomes so that best results could be attained.
6 Stone, R. and Devenney, J.,”Text, cases and materials on contract law”. (2014)
Routledge.
7 Chng, K. and Goh, Y., “A renewed consideration of consideration: MWB Business
Exchange Centres Ltd v Rock Advertising Ltd [2016] EWCA CIV 553”. (2016) Oxford
University Commonwealth Law Journal, 16(2), pp.323-332,
8 Turner, C., “Key Cases: Contract Law”. (2014) Routledge.
5

REFERENCES
Books and Journals
Chng, K. and Goh, Y., “A renewed consideration of consideration: MWB Business Exchange
Centres Ltd v Rock Advertising Ltd [2016] EWCA CIV 553”. (2016) Oxford University
Commonwealth Law Journal, 16(2), pp.323-332,
Corones, S., “Australian Competition and Consumer Commission v. TPG Interney Pty Ltd.,
Forrest v. Australian Securities and Investments Commission: Misleading Conduct Arising
from Public Statements: Establishing the Knowledge Base of the Target Audience”. (2014)
Melb. UL Rev., 38, p.281.
Duffy, S. and Duffy, J., “An analysis of dispute review boards and settlement mediation as used
in the Australian construction industry”. (2014) Building and Construction Law
Journal, 30(3), pp.165-174.
Martin, P., “Estoppel: Binding promise without a contract: Court of appeal considers proprietary
estoppel”. (2016) LSJ: Law Society of NSW Journal, (23), pp.93.
Roberts, M., “MWB Business Exchange Centres Ltd: The Practical Benefit Doctrine Marches
On”. (2017) The Modern Law Review, 80(2), pp.339-351,
Stone, R. and Devenney, J.,”Text, cases and materials on contract law”. (2014) Routledge.
Thampapillai, D., “Practical Benefits and Promises to pay Lesser Sums: Reconsidering the
Relationship between the Rule in Foakes v Beer and the Rule in Williams v Roffey. “
(2015) U. Queensland LJ, 34, p.301.
Turner, C., “Key Cases: Contract Law”. (2014) Routledge.
6