W.J. Alan agreed to sell 250 tons of coffee beans at 262/= per c/wt to El Nasr payable on credit. At the time of the contract the value of Kenyan shillings and pound sterling were of equal value and the contract stipulated the price payable in Kenyan shillings, however the credit account referred payment in pound sterling. There were a number of other discrepancies between the credit agreement and contract such as date of shipping and the quantity to be shipped. These other discrepancies were rectified in a revised agreement however, the new agreement still referred to payment in pound sterling. W.J. Alan accepted the first instalment of £57,000, however, the value of the pound dropped quite dramatically resulting in a loss of 165,530.45/=. W.J. Alan then sought to revert to Kenyan shillings and demanded the further payment. El Nasr raised promissory estoppel in their defence in that in accepting the instalment in pound sterling and redrafting the credit agreement without changing the currency there was an implied promise that they would not revert to Kenyan shillings. W.J. Alan argued that El Nasr had not acted to their detriment in reliance of this promise as they had gained a benefit.
- Is detrimental reliance an essential element of promissory estoppel?
Megaw held that there had been a variation in the form of payment in the revised agreement to pound sterling and that W.J. Alan had waived their right to be paid in shillings. He rejected the supposition that this was a sale of goods deliverable in installments where the terms could vary and held that the sellers could not unilaterally change the currency of exchange.
Denning agreed, holding that once an alternative method of payment is accepted (the pounds sterling) it is deemed to have been accepted as a term of the contract and the sellers had waived their right to be paid in shillings. W.J. Alan could not then withdraw this waiver if it was either too late, or if it would be unconscionable in the circumstances. On the subject of detriment, Denning held that there was no support in the case law for that requirement, simply that the other party had relied on the decision and altered their position.
- Detrimental reliance is not required for promissory estoppel to apply.
- Promissory estoppel requires that the claimant party rely on the actions of the other party and alter their position as a result.