What is a Potential Exam Question on Promissory Estoppel?

Question from fvfv, What is a Potential Exam Question on Promissory Estoppel?

Answer from AI:

Promissory estoppel is a legal principle in the UK that prevents a person from going back on a promise, even if a legal contract does not exist. It is often examined in contract law courses because it illustrates exceptions to the general contract principles. Below is a detailed example of a problem-solving question that could potentially appear in your contract law exam regarding promissory estoppel.

Sample Exam Question on Promissory Estoppel

Background: Alice, the owner of a small bakery, has been renting a commercial space from Bob, the landlord, for the past five years. The original lease was for five years, and it included a clause that rent would increase by 10% each year. Due to a downturn in business caused by local roadworks making access difficult, Alice was struggling to meet her rent payments. Two months before the end of the lease, Alice met with Bob to discuss her situation. During the meeting, Bob verbally promised Alice that if she signed a new five-year lease, he would not increase the rent for the first two years of the new lease to help her recover financially. Relying on Bob’s promise, Alice invested her remaining savings into renovating the bakery and signed the new lease.

One month after the new lease began, Bob sent Alice an invoice reflecting a 10% rent increase, contrary to his earlier promise. When Alice reminded him of his promise, Bob replied that his financial circumstances had changed and he could no longer afford to keep the rent the same. Alice is now considering legal action to enforce Bob’s promise.

Question: Advise Alice on her legal position under the doctrine of promissory estoppel. Consider the elements of promissory estoppel and discuss whether Alice can rely on Bob’s promise to prevent the rent increase. Your answer should explore the following:

1. The nature of the promise made by Bob and its impact on Alice’s decision-making.
2. Whether Alice’s reliance on Bob’s promise was reasonable and detrimental.
3. The possible defenses Bob might raise and their potential effectiveness.
4. The likely outcome if Alice were to pursue legal action against Bob based on promissory estoppel.

Key Points to Consider in Your Answer

• Definition of Promissory Estoppel: Briefly define promissory estoppel and its role in contract law.
• Elements of Promissory Estoppel: Discuss the essential elements required to establish a claim of promissory estoppel, such as a clear and unambiguous promise, reliance by the promisee, and detriment suffered as a result of the reliance.
• Analysis of the Facts: Apply the facts of the case to the elements of promissory estoppel. Analyze whether Alice’s reliance on Bob’s promise was justified and led to a significant alteration of her position.
• Legal Precedents: Reference relevant legal precedents that support your analysis. You might consider cases such as Central London Property Trust Ltd v High Trees House Ltd, a foundational case in the development of promissory estoppel.
• Potential Outcomes: Discuss the potential legal outcomes of the dispute, considering the effectiveness of possible defenses by Bob and the overall fairness of the situation.

Conclusion

In your conclusion, summarize the key points of your analysis and indicate the likely legal standing of Alice based on the doctrine of promissory estoppel. Remember, while this sample provides a framework, your actual exam response should be tailored to the specific instructions and word count provided by your examiners.

For further reading on promissory estoppel, you might find resources like the Law Teacher overview on Promissory Estoppel helpful. Always ensure to consult with legal texts and case law to support your exam answers effectively.