such language should be clearly expressive of an intention to be bound to the obligation, and not simply indicate an intention to be bound at some point in the future,21 no matter whether it is called a promise or something else. Denning J clearly took the view in High Trees that what the landlord had said had indicated promissory intent, so there was no question of finding voluntary liability merely as a result of a statement of future intention. It seems right in principle that liability in promissory estoppel ought only to arise in cases where there is present a clear intention to be bound to an undertaking, whatever the exact words used.22 Of course, were promises lacking consideration able to be directly enforced in English law, then promissory estoppel might develop in ways not restrained by the need to demonstrate the presence of a promise, but such development remains, for the moment, a feature of Common law jurisdictions other than that of England.

What then of the application of promissory estoppel to the field of failed pre-contractual negotiations and wasted expenditure associated with these?

(ii)  Promissory estoppel and failed contractual negotiations

It is useful, in considering the potential relevance of promissory estoppel to the issue of wasted pre-contractual expenditure to have in mind a concrete example. One such is the famous US case Hoffman v. Red Owl Stores.23 Hoffman had received various assurances from Red Owl that the latter would grant him a franchise in the Red Owl grocery store brand. On the faith of these assurances, Hoffman sold existing concerns he had, including a bakery. At one stage, an assurance from Red Owl was given that ‘everything is ready to go. Get your money together and we are set’. This assurance turned out to be inaccurate, as a later telegram from Red Owl Head Office shown to Hoffman by the local Red Owl representative indicated: the telegram stipulated that only if Hoffman could find a further sum, in addition to that already required of him for promotional purposes, could the deal go through. Further conditions were added, and

21The view is taken in Beale, Chitty on Contracts, that either a promise, or an assurance or representation ‘in the nature of a promise’, must have been given (para. 3–089).

22If it is a question of whether an estoppel by representation of fact has been made, then of course representations other than of promissory intent may be relevant (see further Bower, Estoppel by Representation).

23Hoffman v. Red Owl Stores, Inc., 26 Wis.2d 683, 133 N.W.2d 267 (1965). An interesting article, based partly upon interviews conducted with the plaintiff, is Whitford and Macaulay, ‘Hoffman v. Red Owl Stores: The Rest of the Story’.

the negotiations collapsed. Hoffman sued Red Owl for his wasted expenditure, which amounted in total to around $20,000. The Wisconsin court found in favour of Hoffman on the basis of promissory estoppel, stating that Hoffman had reasonably and detrimentally relied on the promises made by Red Owl.

Fried argues that the decision was not actually about liability on a promise, because ‘Red Owl was held liable not in order to force it to perform a promise, which it had never made, but rather to recompense Hoffman for losses he suffered’.24 That seems however to miss an important point about promissory estoppel: while it is true that damages were not assessed in the performance measure, and nor was actual enforcement of any promise made, neither of these is necessary for the establishment of liability in promissory estoppel. That point aside, however, the correctness of the court’s promissory estoppel analysis is evidently dependent upon there being some promise upon which to base liability for the subsequent losses of Hoffman: what then was the relevant promise (or promises) upon which Hoffman relied? The court stated that ‘[t] he record here discloses a number of promises and assurances given to Hoffman … in behalf of Red Owl upon which plaintiffs relied and acted upon to their detriment. Foremost were the promises that for the sum of $18,000 Red Owl would establish Hoffman in a store’.25 In so stating, the court emphasised that it was not the case that any promise would have to be so comprehensive as to meet the requirements of a contractual offer.26

Promissory estoppel, in the form applied in this case, is evidently capable of providing a basis for recovery of pre-contractual wasted expenditure in qualifying cases. Its qualifications are the need to identify (i) a promise made by the defendant, and (ii) losses flowing from reliance on this promise.27 While most losses claimed by a negotiating party are likely to fulfil those criteria, if it transpires that the losses were incurred purely as a result of the decision of the party incurring them, without reference to anything said or done by the other party, they will be irrecoverable. That

27Subsequent to the Hoffman decision, §90 of the Restatement (Second) Contracts was passed, the section stating: ‘A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.’

seems equitable, given that such losses are both risky as well as ­causally unrelated to anything the other party has done.

The Red Owl remedy has not been adopted in English law as a means of remedying wasted pre-contractual expenditure, given English insistence upon a prior legal relationship between the parties to which the promise must relate. However, in Australian Common law a radically developed version of promissory estoppel (argued by some to have transformed into a new, wider doctrine of ‘equitable estoppel’28) has been held applicable in instances of failed contractual negotiations. In Waltons Stores (Interstate) Ltd v. Maher,29 advanced negotiations for the lease of land were in place between the parties. The draft terms of the contract had been agreed, the prospective tenant’s solicitors having assured the prospective landlord’s solicitors that, if last minute amendments suggested by the landlord were not agreed to, then this would be intimated the following day. No such intimation was made, and the landlord’s solicitors subsequently ­despatched a copy of the lease signed by its clients. Without any countersignature by the tenant, the landlord (to the tenant’s knowledge) began demolishing an existing building and the construction of a new one in order to comply with the terms of the envisaged lease. The tenant never signed the lease, and subsequently attempted to renege on the agreement. The High Court, however, held that a contract existed on the basis of promissory estoppel, noting that, given the unconscionability of withdrawing from the agreement, the tenant was ‘estopped in all the circumstances from retreating from its implied promise to complete the agreement’.30 The Court’s discussion of the inequity of withdrawal, together with the focus on the implied assurance given by the tenant, bears close comparison not only with the Red Owl case, but also with the hallmarks of the Scottish approach to pre-contractual assurances discussed below, though with the difference that in the Australian decision the court treated the circumstances as being as if a contract existed between the parties,31 ­damages being awarded for its breach, rather than mere recovery of wasted expenditure being awarded. The Australian approach takes promissory estoppel beyond its traditional role of providing a limited defence against conduct inconsistent with a prior promise and into the territory of enforcing informal promises in order to prevent inequity resulting from the non-enforcement of such promises. Such a radical approach is also

31See judgment of Brennan J, para. 35: ‘equity is to be satisfied by treating Waltons as though it had done what it induced Mr Maher to expect that it would do’.

visible in the view of the Australian courts concerning liability for breaking off contractual negotiations, discussed further below.

(iii)  Proprietary estoppel and failed contractual negotiations

English law has traditionally deemed that, if the right which the claimant is seeking to establish relates to land, the relevant claim will lie in proprietary estoppel, not promissory estoppel, even though, in essence, the foundation of the claim remains that the claimant was led by the defendant’s promise to believe that a certain state of affairs existed, and, on the faith of this, undertook expenditure which turned out to be wasted given that no such state of affairs actually existed. The mere fact that the right concerned is proprietary traditionally means that the claim is treated as a separate type of estoppel, distinct from promissory estoppel, and with the crucial difference that, in English law at least, it can operate as a cause of action not just a defence.32 It has thus traditionally proven useful in cases where, for instance, B believes that it has acquired a proprietary right from A but, because of some failure to comply with formalities, no valid right has in fact been conferred upon B, circumstances which in some jurisdictions would give rise to a statutory remedial entitlement.33 The traditional law in this area was thrown into doubt by the decision of the House of Lords in Yeoman’s Row Management Ltd v. Cobbe,34 which seemed to suggest that proprietary estoppel was a mere sub-species of promissory estoppel.35 However, subsequently, in Thorner v. Major,36 the traditional position was reaffirmed that proprietary estoppel is not simply a subtype of promissory estoppel, and that each form of estoppel has distinct requirements. English law thus continues to take a different approach to that of some other parts of the Common law world, where there has been a growing tendency to view promissory and proprietary estoppel as simply two varieties of equitable estoppel.37 For the moment, where a proprietary estoppel claim is available in English law, it presents the benefit in relation to a claim for wasted pre-contractual expenditure that the claimant has a cause of action rather than merely a defence.

32In Australia and the United States both proprietary and promissory estoppel can give rise to rights, not simply a defence, so that the need to distinguish the two doctrines has been rendered largely obsolete.

33As they do in Scotland, for instance, by means of what is referred to as a statutory form of personal bar: see the Requirements of Writing (Scotland) Act 1995, s. 1(3), (4).

34 [2008] UKHL 55. 35 See judgment of Lord Scott at para. 14.

36[2009] UKHL 18.

37See Spence, Protecting Reliance: The Emergent Doctrine of Equitable Estoppel.