Use of Promissory Estoppel in Business Contracts Essay

Use of Promissory Estoppel in Business Contracts - Essay ExamplePromissory Estoppels atomic number 18 great ways to avoid injustices in the cases were dominion considerations cannot be provided. However Promissory Estoppel has been full of contradictions since they were first mentioned in Section 90 of Restatement of Contracts. They have invoked change emotions such as they marked the death of fuck offs or that consider cases will now be contumacious simply as torts. Promissory Estoppel is still a work in progress. Although Section 90 and 139 which are the basis of promissory Estoppel are brief but the various court cases and judgements have given new-sprung(prenominal) meanings to these two sections. Promissory Estoppels is a way to enforce a contract without whatsoever consideration (Farber & Matheson, 1985). A normal contract consists of three main components an offer being make, the offer being accepted and a consideration being given for the offer (Klass, 2010). As an example let us suppose that association A signs a contract with company B to supply 50 tons of rice per month for $50/ton for 5 years. However if the grain prices fall during the contract period and B wants to renegotiate the price to $40/ton then under the normal contract law this can be done in 2 ways either by giving a consideration such as agreeing to pay for the transportation costs or agreeing to buy more quantity and by annulling the contract and signing a new contract with new terms. However Promissory Estoppels provides an alternate way of doing it without any consideration or annulment. Promissory Estoppels comes into effect when one of the parties has made a prognosticate, the other party has relied on it substantially and when not enforcing a promise will lead to gross injustice to one of the parties. frankincense the three main concepts of Promissory Estoppel are a clear and definite promise, substantial reliance on that promise and miscarriage of justice if promis e is broken. The origin of the modern concept of Promissory Estoppels can be found in the case of Central London Property Trust Ltd vs. High Tree signaling Ltd (Farber & Matheson, 1985). The case was regarding raising the rent of a group of flats after the end of the Second World War. The landlord had made a promise that he would take reduced rent from the tenants during the course of the war. However when the war stop in 1945, he wanted the original rent to be restores. In this case the Judge Denning situated down the principals of promissory estoppels by saying that a promise which is intended to be cover charge is binding as far as it terms apply correctly. This paper discusses the concept of promissory estoppels as use in USA the cases of business contracts where relief can be accepted under promissory estoppels and where the shout for relief is likely to be rejected by courts. Bargain Theory of Consideration A contract is a binding agreement amongst two parties and is the basis for any business transaction between the two parties. Contracts are the heart and soul of all businesses. Some of the contracts are written whereas other whitethorn be simply oral or trust based. Before the concept of promissory estoppels was discovered, contracts were based all on the bargain theory of consideration (Feinman, 1984).According to this theory a promise is enforceable only if it is back up by a consideration which has been sought for or bargained for by the promisor in exchange for the promise made by him. The Bargain theory in like manner requires mutual consent of the offer which means that a clear offer must be made and accepted by the other party for a contract to be enforceable. In the case of New Zealand Shipping co. Ltd vs. AM Satterthwaite & co Ltd Lord Wilberforce has all the way stated that offer, acceptance and consideration are requirements for a contract to be valid. These three factors must also be accompanied with no mistake, misrepresentation and duress which can affect the