Promissory Estoppel Case Summary

a)
After Newland realised that it had under-priced the contract it stopped work and informed S4H that they would not be able to complete the work unless they were paid more. Although S4H were not happy about this request, they had to pay the extra money because no other company was available to complete the work and S4H was on a timetable. Newland completed the work after being paying the extra money and S4H demands a repayment of the extra cost.
The issue in this case is whether S4H can recover the money from Newland. Promissory estoppel prevents a promisor from going back on his or her promise if the promisee relies on the promise to their detriment. It allows a party to recover on a promise and prevents the other party from arguing that his or her promise should not be upheld.
The equitable doctrine of promissory estoppel was established in Central London Property Trust v High Trees Limited
In this case, Tungsten had been infringing on a patent held by Tool Metal Manufacturing. When the later discovered thus infringement, they waived all claims on the infringement provided they were paid 10% royalty and 30% compensation by Tungsten. Tungsten agreed to pay this amount but during the war period they ran in to arrears. An agreement was reached between the two parties to waive the compensation during the period of war. After the war Tool Manufacturing sought to reinstate the license and sued for the license fees. The court held that Tool Manufacturing was entitled to reinstate the fees following a reasonable notice period but could not enforce the payments during the war period. The court noted that they were estopped from reverting on their promise to waive the fees during this period. The court observed that promissory estoppel will suspend legal rights but in cases of periodic payments it could extinguish legal rights where a promise to reduce the payments has been