Contract law assessed coursework Essay Example | Topics and Well Written Essays - 1500 words

Contract law assessed coursework - Essay Example These apartments prove to be in great demand, and Eileen and Paul have a change of mind and ask Anne to either pay rent or vacate the flat. They also ask Mike to enhance the rent with retrospective effect, from the time of completion of the flats. For advising Eileen and Paul in respect of their problems with Mike and Anne, the following issues have to be considered. Whether, there is any legally binding contract between Anne and Eileen and Paul. Whether Eileen and Paul can demand the arrears of rent from Mike, with retrospective effect. The principle of Promissory Estoppel has to be examined for answering these issues. In general, consideration is a very important factor in contracts, and renders a promise enforceable. The promisee has to provide something in exchange for the promise, which is termed as consideration. In the absence of consideration, a promise is in general, rendered unenforceable. In essence, the promisee has to provide something to the promisor, in exchange for th e promise (Capper, 2008, p. 105). In our problem, Mike was paying rent at a lower rate, since the construction work was in progress in the building. However, he had been paying a much higher rent, initially. The following case law indicates the attitude of the courts in deciding issues related to the principle of promissory estoppel. In Williams v Roffey, the court held that the performance of a previous contractual duty was consideration for a subsequent contract. The reasoning behind this ruling is the proper performance of the original contractual obligation would give rise to a practical benefit for the parties to the contract (Williams v Roffey Brothers & Nicholls (Contractors) Ltd, 1991).If the promisee performs something with regard to an earlier contract, which benefits the promisor, then the performance is considered as good consideration. The only requirement is that the performance must have resulted in some practical benefit to the promisor. However, in Re Selectmove Ltd , the appellate court held that the promise of the plaintiff to the Inland Revenue required the payment of arrears. As there were no immediate payments by the plaintiff, there was no good consideration (Re Selectmove Ltd, 1995). In Central London Property Trust Ltd V. High Trees House Ltd, sparse occupancy, occasioned by the World War, had caused the landlord to charge reduced rent. Subsequently, occupancy increased to the extent that there were no vacant flats. The tenants opposed the landlord’s attempt to charge the higher rent, and the court ruled that the tenants had to pay higher rent from the time of full occupancy (Central London Property Trust Ltd v High Trees House Ltd, 1947). This case constitutes the best decision in the Commonwealth and England. It deems reliance to be the basis for altering a contract (Teeven, 2002, p. 350). However, higher rent was not permitted from the very beginning; this constitutes the principle of promissory estoppels. Moreover, in Tool Me tal Manufacturing Co Ltd v. Tungsten Electric Co Ltd, the patent owners had promised to defer periodic payments due to them, from the outbreak of war (Tool Metal Manufacturing Co Ltd v. Tungsten Electric Co Ltd , 1955). The House of Lords held this promise to be binding during the period of suspension. This decision suggests that the principle of estoppel is in general, suspensory. As per the decision in Central London Property Trust Ltd, Mike has to pay the enhanced rent only after the completion of the construction of flats. However, Eileen and Paul demanded him to