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Facts[]

In 1937 High Trees House Ltd. leased a block of flats for a rate £2,500/year from Central London Property Trust Ltd. Due to the war and the resultant heavy bombing of London occupancy rates were drastically lower than normal. In January 1940, to ameliorate the situation the parties made an agreement in writing to reduce rent by half. However, neither party stipulated the period for which this reduced rental was to apply. Over the next five years, High Trees paid the reduced rate while the flats began to fill and by 1945, the flats were back at full occupancy. Central London sued for payment of the full rental costs from June 1945 onward.

Issue

  1. Did the agreement of January 1940 constitute an agreement that the rent would be £1,250 relate to the whole lease?
  2. Were the plaintiffs estopped from alleging the rent exceeded £1,250/year?
  3. Did the plaintiffs waive their rights to additional rent prior to sending a letter on September 21, 1945?

Decision[]

Judgement for the plaintiff in the amount requested. A party who waives a part of the performance of a contract may later re-instate that portion if it would not be unjust or violate the reliance of the other party.


The court reasoned that the rent waiver was only meant to cover the wartime period. Therefore, it was not unjust to raise the rent back to the original amount after the war, when the defendant was able to pay it again. A party who has made a waiver affecting an executory por of the contract may retract the waiver by reasonable notification received by the other party that strict performance will be required of any term waived, unless the retraction would be unjust in view of a material change of position in reliance on the waiver

Ratio[]

A promise intended to be binding, intended to be acted on and in fact acted on, is binding so far as its terms properly apply.

(ADDITIONAL)

Concept of promissory estoppel (elements) -

  1. a legal relationship between promisee and promisor
  2. a clear and unequivocal promise
  3. reliance on the other party on promise
  4. inequitable for promisor to go back on his/her promise
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