Jason Miami and Dampen has concluded a contract to construct a swimming pool at the cost of $30,000 payable on completion of the work, which was not in dispute by either parties. After the construction work has commenced, Dampen has asked Jason Miami for an extra $5,000 to cover the cost of materials and additional effort. The legal issue is whether Jason Miami is bound by thesis promise to pay Dampen the such extra $5,000 to Dampen to cover the cost of the materials and the additional effort.
The extra $5,000 constitutes a new of term in the original contract. According to Preston Corporation Sad Bad V Edward Leone & Ours (1982) 2 ML 22, Damson’s request for an extra cost of $5,000 in order to complete the construction of the pool is specific, ascertainable and constitutes a valid offer. .Generally speaking, there can be no contract unless and until an offer has been accepted. It appears from the facts of the case that Jason Miami accepted the offer by agreeing to pay the extra $5,000 and such acceptance was communicated to Dampen (Enters Ltd v Miles Far Each Corp.. 1955) 2 CB 327). In addition, in the case established that as long as the parties are willing to contract on certain terms, and an agreement is made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed, the Likewise, the introduction of a new term of the original contract requires fresh consideration. The general rule of consideration is illustrated unilateral in the case Still v Myriad (1809) CHEW KGB J.
It has been established in Still that there may be insufficient consideration where the promise is under an existing duty to the promissory to perform an act which is o be the purported consideration. As there is already an agreement between Dampen and Jason Miami for the construction of the swimming pool, Jason Miami may be able to go back on his promise of paying the extra $5,000 due to lack of consideration. However, it should be noted that Taking consideration that Dampen did tell Jason that there will be an extra $5000 added to the cost of constructing of the pool, and Jason agrees to it.
The general principle of law relevant to this issue is that in certain circumstances, discharging an existing duty owed to the promissory can may, in circumstances, constitute good inconsideration for a fresh promise (Williams iv Roofer Pros and Nicholls ([(1990))] 1 All ERE 512). The promise to pay extra will be enforceable where the promissory obtains a practical benefit, or avoids a disestablishment’s, as a result of the promises renewed undertaking to performance’s the contract (Glasswork Brothers v Ignorant City Council (1925) AC 270).
In the current case, Jason Miami has concluded a tenancy agreement with two professionals with a term that there will be a swimming pool by the time they occupy the rooms in September. Jason Miami has chosen these professionals because they were willing to pay high .NET. By ensuring that Dampen completes his work in September, Jason Miami obtains the benefit that he would be able to get the high rent from these specific professionals, rather than other tenants.
Jason Miami also avoided the disestablishment’s of breaching the tenancy agreements for not having a swimming pool by the time the professionals occupy the rooms in September. Therefore, the agreement between Dampen and Jason Miami to complete the construction of swimming pool is supported by fresh consideration, and Jason Miami should not be able to go back on his promise following this line f reasoning it can be argued that Jason obtained “practical benefits” from Damson’s work – this benefit was that Dampen will complete the constructing of pool on time with the additional effort.
Alternatively, if it has been decided that there is no consideration for Jason Mimosa’s promise to pay $5,000, Dampen may rely on the equitable principle of promissory estoppels. Further, Olin the case of Central London Property Trust V v High Trees [((1947))] 1 KGB 130 (KGB), it is. This case established that what is known as the equitable principle of promissory estoppels according to this principle when the promissory who, with the intention o be legally bound, makes a promise to the promises to whom he knows will who relies on it to his or her detriment, will be enforced provided the promissory has acted on it.
This principle is intended to stop the promissory from denying that the statements, word or conduct did not happen. It is important to note that no consideration is necessary, but For this principle to work there must already be a pre-existing contractual relationship and both parties must rely on the promise. With this principle and authority and applying it to In the current situation, Dampen found that the work is more difficult than expected and the cost of materials for construction of the swimming pool have gone higher.
Dampen asked for an extra $5,000 which Jason Miami agreed to pay. Dampen, relying on Jason Mimosa’s promise, has completed the work by September and as a result incurred extra cost and put in additional effort. Therefore Jason Miami is stopped from going back on his promise of paying the extra $5,000. Jason and Dampen, it can be argued Dampen needs that $5000 extra for the materials and the additional effort in order to complete the construction on time and because of this, Jason made the promise so that he will have the pool by then.
However as a counter argument, in the case Still V Myriad (1809) CHEW KGB J establish that there may be insufficient consideration where the promise is under an existing duty to the promissory to perform an act which is to be the purported consideration. According to this principle, Dampen already have an agreement with Jason to complete the construction at the cost of $30000 which that the extra $5000 is not included. Therefore, Dampen may not be entitled to the extra In conclusion, it is high likely that Jason would not be able to go back on his promise of paying the extra $5,000 on two grounds.
First, the promise is supported by fresh consideration and the new agreement constitutes a legally binding contract. Second, if it is determined that there is no consideration for the new agreement, Jason Miami would be stopped from going back on his promise according to the doctrine of promissory estoppels. , not be successful in going back on his promise of paying the extra $5000 to Dampen following the decision in Williams V Roofer Pros and Nicholls case.
Furthermore, Jason cannot deny the promise he made to Dampen that both of them relying on it according to the principle of promissory estoppels. In addition, in the case Preston Corporation Sad Bad V Edward Leone & Ours (1982) 2 ML 22 establish that willingness to contract on certain terms, made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed. With this principle, Dampen to do the extra work at $5000 is an offer, Season’s agreement to pay constitutes an acceptance to the offer.
Thus, Jason is bound to pay Dampen the extra $5000. 2) Advice Dampen whether his promise to accept $20,000 from Jason Miami is legally binding. To determine whether Damson’s promise to accept $20,000 room Jason Miami is legally binding, one should establish whether The key legal points in this question whether Damson’s agreement to accept the $assessors sum from Jason Miami as full settlement is constituted an agreement when Jason is unable to pay the full amount of $35000 as he is having some financial difficulties.
Jason Mimosa’s request to settle the contract with $20,000 is an alteration of term of the original contract. As established in question 1 above, according to Preston Corporation Sad Bad v Edward Leone & Ours (1982) 2 ML 22, Jason Mimosa’s offered to pay Dampen for his work done with $20,000 constitutes valid offer, which Dampen is free to accept or not. In our case, Dampen has agreed to accept the $20,000 as full settlement. It should follow that whether Damson’s agreement to accept a lesser amount is supported by consideration.
The general principle is that unless the debtor provides fresh consideration in t, an agreement to discharge a liquidated debt by the payment of a smaller sum will be void. This is known the ‘Rule in Panel’s Case’. According Panel’s Case (1602) Co. Rep. AAA, part payment of a debt is no consideration for discharge of the whole debt. The rule was subsequently confirmed by the House of Lords in Fakes v Beer (1884) 9 App Sacs 605 (HI). And endorsed in Singapore in the case of Euro-Asia Realty Pet Ltd v Mayfair Investment Pet Ltd.
Therefore, prima facie, Jason Mimosa’s part payment of $20,000 to pay the whole debt of $35,000 would not be considered a discharge of its debt to Dampen. Similarly, the rule of consideration stipulates that the person to whom the promise is made must furnish the consideration (Twaddle v Atkinson (1861) CHEW CB J). If the person gives no consideration for a promise he cannot sue on that promise whether or not he is the person to who the promise is made. In our case, Jason Miami, the promises, gives no practical benefit to Dampen for Damson’s promise to accept a lesser amount for his work done on the swimming pool.
The relevant principle of law in this situation is based on the case law authority D & C Builders Ltd V Reese (1965) EACH Civic 3. This case establish that payment of a lesser sum of money for a greater debt is not good consideration. According to this principle, Dampen was forced to accept the $20000 by Jason as he is unable to pay the full amount of $35000 as he is having financial difficulties. Therefore, Jason is bound to pay the remaining $15000 because Dampen gave no consideration to accept an agreement that was unsatisfactory.
However, there are four exceptions to the Rule in Further in the case of Panel’s Case (1602) 5 Co. Rep. AAA. Lit was held, amongst other, that if a new element is introduced to which the creditor was not already entitled, such as in the court that the payment before the due day at the creditor’s request, provided the new element is introduced for the creditor’s benefit and not merely the debtor’s convenience, is valid consideration Vandenberg v SST Edmunds Properties Ltd [1933] 2 KGB 223 (ACE)).
This exception should not be applicable to the current case because (i) it was Jason Miami (the debtor) and not Dampen (the creditor) who made the request for a smaller sum, and (ii) the promise to pay a lesser SUm was made after the due day, when Dampen has already completed the work. Creditor’s promise to accept a smaller sum would be binding if he ask the debtor to pay that smaller amount before the due date at creditors request. According to this principle, Dampen is entitled to the remaining $15000 as he did not voluntarily agrees to accept the lesser um of $20000 in satisfaction.
Further, one should also consider whether there is sufficient legal intention to create legal relations. It should be noted that there is a presumption that parties to an agreement of a commercial character intend their agreement to be contractually binding. The presumption can only be rebutted by sufficient evidence indicating that the parties in fact possessed a contrary intention at the time the agreement washerwomen was concluded. From the facts of the case, it appeared that Dampen was “not very happy” with accepting a lesser sum.
From a reasonable persons in Damson’s position, it is unlikely that Dampen regarded their agreement as binding, especially when he has previously demanded extra $5,000 for the cost of the material and additional effort. One may raise the doctrine of promissory estoppels as a counter- argument. Promissory estoppels forbids a party from resoundingly out from a statement made or a position adopted where it would be inequitable to do so. In the current case, Dampen has agreed to accept a lesser sum of $20,000 because Jason Miami has alleged that he is in financial difficulties.
From a strict instruction of the particularities’ performance, it cannot be argued that it would be inequitable for Dampen to go back on his promise because Dampen has performed his work and Jason Miami there has been no facts suggesting that Jason Miami has acted upon such promise in detriment. Accordingly, it is likely that Damson’s agreement to accept $20,000 as a full settlement would not be legally binding due to lack of consideration and lack of intention to create legal relations. References As Dampen was forced to accept the smaller sum, this means the intention to create legal relation is absent.
In the case Edwards V Skyway (1964) 1 WALL 349, where a bonus payment was promised to an employee, this was found to be legally binding. He had relied upon the promise in accepting it, and his employer could not adequately prove that they had not intended their promise to become a contractual term. According to this principle, Dampen can argue that he didn’t have the intention to accept the $20000 (lesser sum) as full settlement of the construction of the pool, thus there is no legally binding contract between him and Jason. However as a counter argument, in the case Central London
Property Trust V High Trees (1947) KGB 1 30 establish that an equitable doctrine which in some instances can stop a person going back on a promise which is not supported by consideration. With this principle, Dampen may not be entitled to the remaining $150000 as he accepted the lesser sum, he was stopped from going back on this promise.
