7 - variation of contract

• methods of variation

  • agreement in contract to vary (separate contract)
  • Novation (replacing old contract with new one)
  • by deed (needs to be in writing, doesn't require consideration)
  • promissory estoppel
  • absent duress (alleging duress invalidates a contract form the start)
• Pinnel's case

  • a debtor alleged that the creditor agreed to accept a lesser sum, one defence to debtor was accord and satisfaction (parties made an agreement for the debt to be paid in a different manner and may be a different amount). Held, can't have just that, there needs to be separate consideration as well (eg less money but give something else as well)
• Foaks v Beer

  • debt case. Held, needs to be other consideration as well as less money
• Stilk v Myrick

  • Ship in a port halfway through journey, crew deserted, captain told remaining crew that if they remained the rest of the journey, he would give them equally the wages of those who left, he went back on his promise. Held, they didn't do anything more than they were contractually obligated to do so there was no consideration
• Williams v roffey

  • W provide carpentry and joinery to R, who are renovating a block of flats, fixed price agreed in advance, W offered a bonus per flat completed as he is working slowly, went to court for the bonus. Held, he only did the job he agreed to do in the first place
  • Stilk and Myrick rule applied to prevent economic levers to gain economic benefits under a contract beyond that which they were originally entitled
• Promissory estoppel

  • gets around lack of consideration
  • equitable doctrine
  • rule of evidence
  • limitations on doctrine as a result of evidential origin
  • an estoppel is a rule that you cannot give evidence in a case on certain matters
• promissory estoppel 1877

  • hughes v metropolitan railway - railway workers houses subject to lease with a repairing clause (lessee has to carry out repairs at freeholders will), clause activates, railway offers to buy houses, unsuccessful, freeholder kicks lessee out for not doing repairs, but that time period was during the discussion to buy the houses so it was assumed the repair notice would be put on hold. Held, freeholder led MR to believe they were entering in a mutually beneficial contract, so landlord couldn't rely on lease and the contract resumed
• promissory estoppel 1946

  • Central London property trust v high trees house - CLPT own HTH, during this time there were bomb scares so people moving out of the HTH flats, HTH report to CLPT that there is an issue transferring the rent to them, CLPT said they can pay half as there's a war. Post wat flats fill up. Question when start paying full rent to CLPs again, what about missed rent (repaid?). Held, can enforceable make a concession to another party without there being formality or consideration (this is promissory estoppel)
• shield not a sword

  • Combe v Combe - parents divorced, husband agreed to pay sum to wife, its not made into a court order and she doesn't apply to court for maintenance as court would have set less than husband promised. husband fails to pay wife goes to court for damages. Held, no consideration, wife council plead promissory estoppel and they lose (its a defence not for the prosecution)
• Collier v P&M J Wright - PMJ seeking bankrupcy of C to recover a debt of £50K from him, Proudfoot and Flute, debt arranged to be paid in equal amounts from the three each month, C and P defaulted on the arrangement, w visited C at work and asked for the money, C expressed concerns about P and F, W told C to pay his share and he would chase the others up, C applies for bankruptcy and needs to show hw has a viable defence to the claim of money with something that has a realistic prospect of success, he uses promissory estoppel as defence. W gives up as 2 of them are bankrupt
• Promissory estoppel

  • only applies to existing contracts
  • Promise must be acted on by promisee
  • suspends rights of promisor
  • full rights can be reinstated by notice
  • or become automatically reinstated by notice
  • must only be applied if it would be inequitable to permit promisor to go back on promise
• types of duress (makes contract voidable)

  • duress of the person - physical threat involved
  • duress of goods
  • economic duress
• duress of the person (rarely goes to court out of fear of repercussions)

  • Barton v Armstrong - to do with getting someone to sign property papers with a physical threat
• Duress of goods

  • the universal sentinel - international transport workers federation in dispute with ship owners of US over wages, conditions etc, US docked halfway during voyage and ITWF blacklisted it (couldn't refuel, offload cargo), US owners negotiate an agreement and the IWTF also want a donation to their union welfare fund, US doesn't actually pay in the end. Held, successful defence with duress of goods as their property was held and had powers exercised over it in order to hurt them or coerce them into an agreement
• economic duress

  • the Atlantic Baron - AB ordered by North Ocean shipping as a new build from Hyundai, Contracted to build ship at fixed price (dollars), all outgoings in Korean Hwan, Hwan goes up against dollar, H worried profits go down and so suggest that ship remains in the dock uncompleted unless NOS agree to pay 10% to make up currency shifts, they agree, NOS seek to get their money back but fail due to actions and time. Held, had NOS not affirmed the contract, they would have been voidable for economic duress (illegitimate threat)
• Basket case

  • Atlas Express v Kafco - K importing baskets, Woolworths put in a big order, K agree, K agreement with AE is based around cartons of a fixed dimension and they pay per carton, AE presents K with a new contract which includes a minimum number of cartons each trip, K agrees as they are told the van will leave if they don't sign, AE sues when K pay only what they would have paid under original contract. Held, AE lose because of economic duress
• Duress summary

  • Duress of the person - threat of violence
  • duress of goods - detention of, or threat of damage to goods
  • economic duress - threat to cause disproportionate economic damage if don't comply
  • threat must be illegitimate
  • must coerce innocent party
  • only needs to be one factor affecting the decision