Cambridge BA: Consideration & Promissory Estoppel Exam Paper

Alice owns a chain of boutique hotels. In January, she approached Bob, a renowned chef, asking him to leave his current position and open a restaurant in her flagship hotel. Alice promised to pay Bob £80,000 annually and provide free accommodation worth £20,000. Bob agreed verbally but Alice insisted they postpone signing a written contract until March 'for tax reasons'. In February, Bob gave notice to his current employer, declined two other job offers, and began developing menus for Alice's restaurant. He also spent £5,000 of his own money on specialist equipment. In early March, Alice discovered that a famous celebrity chef was interested in the position. She told Bob that the deal was off because 'we never had a proper contract anyway' and offered him £2,000 as 'goodwill payment' for his trouble. Bob, now unemployed and having missed other opportunities, seeks your advice. Charlie, Alice's business partner, had witnessed their January conversation and told Bob 'don't worry, Alice always honors her promises'. Consider the enforceability of Alice's promise and any remedies available to Bob.

Green Ltd, a renewable energy company, entered into a five-year contract with Solar Corp to purchase solar panels at £1,000 per unit, with delivery of 100 units quarterly. After two successful years, Solar Corp faced severe financial difficulties due to increased raw material costs and threatened to cease performance unless Green Ltd agreed to pay £1,200 per unit. Green Ltd's CEO, David, was concerned about finding alternative suppliers and the potential delay to their major construction projects. He agreed to the price increase, stating 'we value our partnership and understand your difficulties'. This arrangement continued for six months. Meanwhile, David discovered that Solar Corp had simultaneously negotiated a more profitable contract with Blue Energy at £1,300 per unit, prioritizing Blue Energy's orders when supply constraints arose. Feeling deceived, David contacted three alternative suppliers who quoted £950 per unit with immediate availability. Green Ltd now wishes to revert to the original £1,000 price, claiming the increased payments were made without consideration and under economic duress. They also seek recovery of overpayments totaling £20,000 made during the six-month period. Solar Corp argues that Green Ltd benefited from continued supply during a market shortage and cannot now claim duress. Advise Green Ltd on the prospects for their claims.

"The doctrine of promissory estoppel has evolved from a defensive shield into an offensive sword, fundamentally altering the landscape of English contract law and challenging the traditional primacy of consideration." Critically evaluate this statement, examining whether the expansion of promissory estoppel represents a welcome development or an unwarranted erosion of contractual certainty.

"Consideration remains the cornerstone of English contract law, but its application in modification cases has become so confused and unprincipled that wholesale reform is now essential." Analyze the current state of consideration doctrine in contract modification, examining whether the problems identified justify fundamental reform or whether incremental development remains preferable.