Can a promise to create a contract to legally bind all parties?

What would amount to a promise?

In everyday life there may be situations where someone will promise to do something without considering the implications of their promise.  

Where a promise is said in a conversation, with no intention to create any sort of legal contract, it will be highly unlikely that the courts will take this as a person’s intention to create legal relations.

The courts approach to the doctrine of promissory estopell

The concept of promissory estopell was originally created by the courts of equity.  

Promissory estopell most commonly occurs when a person genuinely and honestly believes they have entered into a contract of some sort due to a promise made by the other party.  

Lord Denning has commented on this doctrine stating; 

‘A promise to accept a smaller sum in discharge for a larger sum, if acted upon, is binding notwithstanding the absence of consideration’ 

The promise only becomes final and irrevocable if the promisee cannot return to their original position.

Detrimental Reliance

For the courts to usually enforce a promise through promissory estopell there will have to be some form of detrimental reliance. 

For the promise to be enforced as the intention to create a contract one party will have to rely on the words or conduct said to such an extent that they acted upon the reliance in some way.

Part payment of a debt

If a debtor offers to pay part payment of a debt they owe, and the creditor voluntarily accepts that offer, and in reliance on this acceptance to only pay part payment of the debt, the debt goes on to pay that part of the debt, the creditor will be subject to the doctrine of promissory estopell.

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For more information on:

  • Intention to create legal relations
  • Intention to create legal relations on separation or divorce
  • Intention to create legal relations in a commercial context