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58 the enforceabilit y of promises

cause of action.140 Thus, if B incurs expenses in reasonable reliance on A’s seriously made promise to make B the gift of a car, B cannot plead estoppel if A fails to deliver the car. The promise is not enforceable, nor can B recover his reliance losses. B’s reliance would, however, be relevant, if A had promised B that B need not fulfil his contractual obligation to cut A’s lawn that weekend (further examples are provided in Cases 11 and 12 and are discussed in the answers to those questions). The distinction between using estoppel as a defence and using it to found a cause of action is commonly expressed by saying that ‘estoppel is a shield not a sword’. This distinction is crucial for the resolution of Case 1 (and for the resolution of many of the questions discussed below), because there are no pre-existing legal relations between any of the parties. This is why reliance on Gaston’s promises is legally irrelevant.

Nevertheless, whilst reliance on the promises in Case 1 is irrelevant to their enforceability as a matter of strict or orthodox law, it is undoubtedly relevant to whether the courts in fact apply the law strictly. It is often alleged that English courts invent consideration or find some other way of upholding promises which, according to orthodox law, should not be enforceable, and, furthermore, that the fact of reliance on a promise is the most common reason courts take such an approach. Thus, everything else being equal, courts are more likely to find consideration (or perhaps to hold that a trust was created) where the promisee has detrimentally relied. Whether they in fact do so will depend primarily on the extent of the reliance and the ease with which consideration, or a trust, could be found. As discussed above, it is highly improbable that a trust would be found in any of the cases and a finding of consideration is a strong possibility only in Case 1(b), the promise of a gift on marriage, since Gaston’s language here is arguably open to more than one interpretation. It is possible that if the charity in promise 1(c) relied on Gaston’s promise, a court might hold that this reliance was requested by Gaston, and thus was consideration in exchange for his promise, but this seems unlikely on the facts. To conclude, reliance is likely to be relevant only to the enforceability of the promise in Case 1(b).

ireland

In Irish law a promise is not as a general rule binding as a contract unless it is made in a deed or is supported by some consideration.

140See, e.g., Combe v. Combe [1951] 2 KB 215, where the court refused to enforce a husband’s relied-upon promise to pay his wife maintenance after a divorce.

c ase 1: promises of gifts

59

Irish law recognizes a promise to be enforceable if the promisee provides consideration in exchange for the promise. A basic feature of that doctrine is the idea of reciprocity: ‘something of value in the eye of the law’ must be given for a promise in order to make it enforceable as a contract.141

In accordance with the above, in Case 1(a), Gaston is not bound by his promise to his niece Catherine because this is simply a promise to make a gift and Catherine has not provided consideration.

In Case 1(b), Gaston is not bound to his daughter Clara because she was about to marry as again there is no consideration. Moreover, the contract has not been evidenced in accordance with the requirements of section 2 of the Statute of Frauds (Ir.) 1695, which provides in part:

No action shall be brought . . . whereby to charge the defendant upon any special promise to answer the debt, default or miscarriage of another person, or to charge a person upon any agreement made upon consideration of marriage . . . unless the agreement upon which such actions shall be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith, and some other party thereunto by him lawfully.142

This part of the statute is of little importance today and the English counterpart has been repealed.

In Case 1(c), Gaston is not bound to the United Nations Children’s Emergency Fund for famine relief as again there has been no consideration.

Similarly, Gaston is not bound by his promise to a waitress with a nice smile.

Gaston could bind himself by making the promise formally. If the promise is contained in a deed under seal, then it would be binding for the purposes of making a contract at common law. In the days before handwriting became common, the impression upon hot wax of a crest or coat of arms (e.g. by using a signet ring) was of paramount importance. However, this is not so today as only companies have official seals.143 It

141 Thomas v. Thomas [1842] 2 QB 851; see also O’Neil v. Murphy [1936] NI 16.

It is necessary briefly to explain the reasoning behind any references to English case law during the course of this discussion. Contract law litigation and reported cases arising therefrom are more prevalent in England than in Ireland. Having regard to this fact and the similarity between the countries’ contract law positions, Irish courts have tended over the years, as a matter of practice, to have regard to English precedents.

However, it is crucial to understand that regard is had to English precedents or case law only in circumstances where there are no earlier Irish precedents or case law on the issue and in such situations the English precedent or case is only considered as persuasive authority and an Irish court is clearly not bound to follow them.

142See the judgment of Sugden L. C. in Saunders v. Cramer [1842] 5 I.Eq.R. 12.

143See Friel, Contract, ch. 7.

60 the enforceabilit y of promises

seems clear that some mark or impression must be put on the deed, despite some dicta suggesting the contrary, even if the impression is only caused by the end of a ruler to act as the seal.144 Once the deed has been sealed, it then takes effect on delivery.145 Delivery does not mean transfer of possession but merely conduct indicating that the person who has executed the deed intends to be bound by it.146

To take effect as a deed an instrument must make it clear on its face that it is intended to be a deed and must be validly executed as such.147 It appears that the promisor does not even have to sign the document.148 There is, however, no Irish equivalent to the English Law of Property (Miscellaneous Provisions) Act 1989.

Requirements for a valid deed under seal are not generally known to lay people. While a deed may, in general terms, contain a future covenant, it may not contain a clause by which it is to take effect at a future date. If it does so, much of it as purports to do so is void and the deed will pass an immediate interest.149

Gaston could also bind himself by making the promise by way of a trust. A trust is a relationship which arises whenever a party (called the trustee) is compelled in equity to hold property, whether real or personal, and whether by legal or equitable title, for the benefit of some persons (who are termed beneficiaries and of whom he may be one) or for some object permitted by law, in such a way that the real benefit accrues, not to the trustee, but to the beneficiaries or other objects of the trust.150 Requirements for a valid trust are not generally known to lay people.

However, although a trust is a type of equitable obligation which can be perfectly valid without the element of consideration being present, this undoubtedly is a cumbersome way to bind oneself. The most significant difference between a contract and a trust is that beneficiaries can enforce a trust even though not party to its creation whereas only the actual parties to a contract can enforce it.151

In order to bind himself by way of a trust, Gaston must ensure that the following three elements are present: (1) certainty of intention or words;

144 See Re Smith [1892] 67 LT 64. See also J. C. W. Wylie, Irish Conveyancing Law, 2nd edn

(1996), ch. 16.

145 See Evans v. Gray [1882] 9 IR 539.

146 See Treitel, Contract, ch. 10. See also Xenos v. Wickhem [1866] LR 2 HL 296.

147 See Evans v. Gray [1882] 9 IR 539.

148 Drimmie v. Davies [1889] 1 IR 176.

149See Goodtitle on the Demise of Dodwell against Gibbs, 1 KB [1827] 716; see also, R. F. Norton, Norton on Deeds (1885), ch. 14.

150See generally H. Delaney, Equity and the Law of Trusts in Ireland (1996).

151See Twiddle v. Atkinson [1861] 1 B & S 393. See also Dunlop Pneumatic Tyre v. Selfridge & Company Limited [1915] AC 847.

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(2) certainty of subject matter; and (3) certainty of objects. Although no formalities are required for the creation of an inter vivos express trust for personalty (i.e. personal property), and provided the settlor manifests the intention of creating such a trust,152 it may be established orally.153 However, strong evidence is required in such a case.

In light of the above, in Cases 1(a), 1(b), 1(c), and 1(d), Gaston could bind himself either by way of a deed under seal or by using a trust. In the case of the promise to the United Nations Children’s Emergency Fund (Case 1(c)), he would use a specific form of trust called a charitable trust.

Gaston’s estate is not liable where he was not originally bound by the promises. In the case of a deed under seal, Gaston’s estate will be liable where the deed is found to be valid. If the original trust was valid and Gaston was bound by it during the course of his lifetime, then on his death his estate will also be liable.154

As established above, there has been no legally binding contract as there has been no consideration by the promisee, nor has a formally sealed legal document been executed to this effect. Where the promisee cannot show consideration he/she may be able to rely on the equitable doctrine of promissory estoppel. Thus, although the needs of the conventional doctrine of consideration cannot be satisfied, some limited compensation may be received through the doctrine of promissory estoppel.

The enforceability of a non-bargain promise was the central issue in the case of Central London Property Trust v. High Trees.155 In this case Lord Justice Denning applied the principle that ‘a promise intended to be binding, intended to be acted on and in fact acted on, is binding so far as the terms properly apply’. This case was cited with approval in the Irish courts by Mr Justice Barron in Kenny v. Kelly156 who decided that the facts of that case came within the principles established in the High Trees case.

However, both the English courts and the Irish courts have attempted to limit the principle as enunciated in the High Trees case as follows:

First, the right to resile from a statement should be available where reasonable notice is given.157

Second, the promisee may have to show an element of detriment, although whether he must is not clear. In McCambridge v. Winters,158 Mr Justice Murphy referred to the judgment in Lowe v. Lombank Limited159 whereby it was held that where a representation is made and ‘believed’ to

152

See Paul v. Constance [1977] 1 WLR 521.

153

See Patterson v. Murphy [1853] 11 Hare 88.

154

See Jones v. Locke [1865] 1 Ch. App. 25.

155

[1947] KB 130.

156 [1988] IR 457.

157

See Ajayi v. R. G. Briscoe (R.T.) (Nigeria) Ltd [1964] 1 WLR 1326.

 

158

Unreported, 28 May 1984.

159 [1960] 1 WLR 196.