CONTRACT LAW - Consideration Essay Example | Topics and Well Written Essays - 1500 words

CONTRACT LAW - Consideration - Essay Example In accordance, with the principle of promissory estoppel, Peter cannot go back on his promise to Rapid Builders and thereby causing a loss to the latter1. The realisation of a practical benefit to the promisor can be treated as consideration for the extra bonus or incentive offered by him. In CTN Cash and Carry Ltd v. Gallaher Ltd, the Court held that the promisor had received the practical benefit from the promise. The Court further opined that this practical benefit constituted the consideration for the additional payment promised by the promisor2. The reasoning of the Court in Williams v. Roffey suggested that if one party to a contract had promised to perform the existing contractual duty, and if there had been no detriments to the other party, and if the promisor had benefitted, then it could be said that there had been good consideration3. Promissory estoppel can be used as an instrument of defence and not as a cause of action. It was first employed in Central London Property Trust Ltd v High Trees Ltd4 and the ruling in Coombe v Coombe5 relied upon it. Due to financial setbacks and the Yuletide season not proving to be as lucrative as Peter had hoped that it would; he was unable to pay Keg Ltd the agreed upon amount of  £8,000 for the supply of champagne. As per the extant case law, a part payment of a debt cannot be considered as full settlement of the outstanding debt. Hence, Peter has to pay Keg Ltd the remaining  £2,000. The relevant case law has been discussed in the sequel. In D & C Builders v. Rees, the plaintiff sustained substantial financial loss. The defendant agreed to pay just  £300 towards the complete repayment of her debt. The plaintiff accepted this lesser amount due to financial duress. Later on, the plaintiff company sued the defendant, in order to recover the remainder of the amount due from her. The Court held that the plaintiff was