Legal Maxims

By Vijay Kumar

Promissory estoppel - prevents one party from withdrawing a promise made to a second party if the latter has relied on that promise and acted upon it.

The doctrine of promissory estoppel was first developed in Hughes v. Metropolitan Railway Co [1877] but was lost for some time until it was resurrected by Lord Denning in the controversial case of Central London Property Trust Ltd v. High Trees House Ltd [1947] - In this case, the plaintiffs leased a block of flats to the defendants at an annual rent of £2500 - but, because the defendants were unable to find enough tenants while London was being bombed during World war II, they agreed to accept a reduction in rent to £1250. There was no consideration for this promise to accept a lower rent. At the end of the war the flats were again fully let, and the plaintiffs claimed the full rent for the remainder of the contract beginning the final half of that year, 1945. Denning J held that, in good conscience, they were entitled to the full rent from the end of the war, but noted that they were estopped from going back on their promise had they claimed rents from the wartime period as well.

Estoppel is "a shield not a sword" — it cannot be used as the basis of an action on its own. It also does not extinguish rights. In High Trees the plaintiff company was able to restore payment of full rent from early 1945, and could have restored the full rent at any time after the initial promise was made provided a suitable period of notice had been given. In this case, the estoppel was applied to a 'negative promise', that is, one where a party promises not to enforce full rights.

It is true that the doctrine of promissory estoppel is applicable against the Government in the exercise of its governmental, public or executive functions and the doctrine of executive necessity or freedom of future executive action cannot be invoked to defeat the applicability of the doctrine of promissory estoppel. – Supreme Court of India

Promissory estoppel not applicable against legislature exercising legislative functions – Supreme Court of India

Doctrine of Promissory Estoppel has no application whatsoever in respect of the statutory exercise of powers.