Contract Law Part 1 Essay Example | Topics and Well Written Essays - 2500 words

Contract Law Part 1 - Essay Example Initially, it was not given much recognition by the courts. It was left to Lord Denning to assess its significance and reintroduce it in Central London Property Trust Ltd v High Trees House Ltd. In this case the plaintiffs had leased out a number of apartments to the defendants. Thereupon, the World War had commenced. Consequently, the occupancy of these apartments reduced drastically. The defendants requested the plaintiffs and obtained a reduction in the lease amount. Afterwards, the World War came to an end and all the apartments were occupied. At this juncture, the plaintiffs demanded the originally agreed upon lease amount, for the period when the World War had been in progress. Lord Denning ruled that this was inequitable, because this would require the defendants to pay the full amount even though the apartments had been vacant2. Therefore, the plaintiffs were made subject to a promissory estoppel. It was held by the Court of Appeal in Williams v Roffey that where a party to an existing contract later agrees to pay an extra bonus in order to ensure that the other party performs his obligations under the contract, then that agreement is binding if the party agreeing to pay the bonus has thereby obtained some new practical advantage or has avoided a disadvantage. It was also held that executing an existing contractual obligation constitutes valid consideration, because it prevents the breaching of a contract with a third party3. Moreover, in CTN Cash and Carry Ltd v. Gallaher Ltd, it was decided that the practical benefit accruing to the promisor must be treated as consideration for extra payment4. In Central London Property Trust Ltd V. High Trees House Ltd, rent was reduced during World War II, as per the new agreement. After, the war was over, the landlord attempted to invoke the original contract, in order to obtain higher rent. The tenants invoked the principle of estoppel against the landlord and prevented him from enhancing the rent. In