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Published: Fri, 02 Feb 2018
Lord dennings influence on the law of contract is beneficial
“Although Lord Denning was a maverick, his enduring influence on the Law of Contract has largely been beneficial.”
Lord Denning was a man of monumental influence over the development of English law, both in its substance and style. One commonly held assessment of Lord Denning’s jurisprudence (his legal philosophy and approach to law) is that he was more concerned to “do justice according to the parties in a case” than slavishly to follow precedent. Born in the 19th-century, commonly nominated as the most influential judge of the 20th-century, Lord Denning had a substantial impact across the different avenues of contract law.
Traditionally the courts have required that agreement be demonstrated by an offer made by one party and by complete acceptance of that offer by the other party. However, Lord Denning took the view that the circumstances as a whole should be examined in an attempt to discover whether there was agreement. In Butler Machine tool Co. Ltd. V. Excell-o Cooperation Ltd, where the Court of Appeal analyzed the exchange of standard contract forms as to form the contract between the parties on the basis of offer and acceptance, Lord Denning attacked this traditional approach. In his words, “In many of these cases our traditional analysis of offer, counter offer, rejection, acceptance and so forth is out of date… The better way is to look at all the documents passing between the parties and glean from them or from the contract of the parties, whether they have reached agreement on all material points”. Although this approach was rejected by the House of Lords in Gibson V. Manchester C.C., it appears that a contract may be found to exist despite the fact that it can not be analyzed precisely into an offer and corresponding acceptance, where the terms have been fully agreed and executed by the parties.
Perhaps one of the dramatic changes to the law of contract by Lard Denning is promissory estoppels. It was generally thought that the common law provisions of part payment of debt as held in Pinnal’s case, would apply in the case where a creditor promises to accept a smaller sum than is due from a debtor and promises not to sue for the balance, the former is not bound by his promise and thereby he can’t be barred to enforce his claim of the remaining debt in the court unless the debtor offers some kind of consideration for the promise to forgo the balance like the gift of a horse, hawk or robe, if accepted by the creditor, since the court will not inquire into the adequacy of the consideration. In Foaks v. Beer, the House of lords confirmed the decision in Pinnal’s case. Mrs beer was owed £2090 19s by Dr. Foaks, and agreed with him that he should pay it in instalments, after which time she promised she would take no further action. The sum was paid over five years and Mrs Foaks was sued for £360 interest. It was held that she was entitled to it. Her promise to take no further action was not binding as Dr. Beer has given no consideration for it. But Lord Denning thought differently. If a creditor promises to accept a smaller sum in full settlement intending the debtor on that promise and the debtor does rely on it, the debtor may have a defence of promissory estoppels when sued for the balance by the creditor. The promise will in this way be enforceable despite the absence of consideration to support it. In Central London Property Trust Ltd. v. High Trees House Ltd., in 1937 the plaintiffs let a block of flats to the defendants for 99 years at a rent of £2500 p.a. In 1940 the plaintiffs agreed to reduce the rent to £1250 p.a. as many of the flats were unlet because of the war. At the end of the war, the plaintiffs demanded full rent for the last two quarters of 1945 and thereafter. Lord Denning upheld their claims as the agreement was obviously only meant to last during the war. However, he indicated obiter that if the plaintiffs had tried to claim the full rent they had relinquished during the war, they would have been unsuccessful on the basis of Hughes v. Metropolitan Railway. “A promise to accept a smaller sum in discharge of a larger sum, if acted upon, is binding notwithstanding the absence of consideration: and if the fusion of law and equity leads to this result, so much the better. That aspect was considered was not considered in Foakes v. Beer. At this time of day, however, when law and equity have been joined together for over seventy years, principles must be reconsidered in the light of their combined effect” per Denning J.
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