Question 25 (b)

PRESENTATION ON
TUTORIAL QUESTION ON
PROMISSORY ESTOPPEL

FACTS

Northern University offered a university bungalow

to Mr. Diaz, a lecturer at the Faculty of Law, if Mr.
Diaz agrees to hold position as a Fellow in Abu Bakr
College.
If he remains as the fellow, they will not ask him to
quit the said premises.
Mr. Diaz sold his semi-detached house and moved
into that bungalow with his family in reliance on the
said promise.
The University decided to sell some of its
properties, including the one occupied by Mr. Diaz,
due to financial constrains.
A notice to quit the said promises was sent.

IS THERE
ANY
REMEDY
FOR MR.

DOCTRINE OF PROMISSORY
ESTOPPEL
Prevents a party from acting in a certain
way because the first party promised
not to, and the second party relied on
that promise and acted upon it.
Provides a means of making a promise
binding, in certain circumstances, in the
absence of consideration.

FEATURES OF PROMISSORY
ESTOPPEL
Mere silence can
give rise to a
promise or
active
encouragement

Clear and
unequivocal

Doctrine applies
even if there is no
pre-existing legal
or contractual
relationship
between parties

Unfair/Unjust

Promisors act
has influenced
the promisee

Representation
may be of fact or
of law

LEGAL ISSUES
ARISED

1. Whether Mr. Diazs reliance on the

promise made by the University is
valid?
2. Whether the University was allowed
to go back on its promise that not to
ask Mr. Diaz to quit the bungalow as
long as he remains as a fellow?
3. Whether the Universitys act to offer
Mr. Diaz the universitys bungalow has
influenced him to sell his semidetached house?

WHETHER MR. DIAZS RELIANCE ON THE PROMISE

MADE BY THE UNIVERSITY IS VALID?

Law
Mere silence can give rise to the promise/ active
encouragement

Authority

Boustead Trading Sdn Bhd v Arab Malaysian

Merchant Bank Bhd

Application

As Mr. Diaz sold his semi-detached house and

moved his family to the said bungalow, he give an
active encouragement on the promise made by the
University.
A reasonable man assumes that he had agreed to
the promise even without providing consideration.
So the party are contractually binding and estoppel

Law

Authority

Application

It must be unfair/unjust
for the promisor to go
back to his promise
and insist on his legal
right

Teh Poh Wah v

Seremban Securities
Sdn Bhd

University cannot ask

Mr. Diaz to quit the said
premise even though it
sent him the notice to
quit the said promise.
The promisor cannot
go back to its promise
because it wold be
unfair/unjust to do so.

W H E T H E R T H E U N I V E R S I T Y S AC T T O O F F E R M R. DI A Z T H E U N I V E R S I T Y S B U N G A LO W
H A S I N FLU E N C E D H I M T O S E L L H I S S E M I - D E TAC H E D H O U S E ?

Law

The promisee must prove that the promisors act has

influenced the promisee.
Traditional View: Must prove
Federal Court: Detriment element does not form part of the
doctrine of estoppel

Boustead Trading Sdn Bhd v Arab Malaysian Merchant Bank

Bhd
Authorit Societe Italo-Belge pour Le Commerce et lIndustrie v Palm
and Vegetable Oils (Malaysia) Sdn Bhd ( The Post Chaser)
y
It is seen that the Universitys act on telling Mr. Diaz that as
long as he remains as a fellow, it will not ask him to quit the
premise, has influenced Mr. Diaz to sell his semi-detached
Applicati house.
on
Doctrine of promissory estoppel is applied

WHETHER THE FINANCIAL PROBLEM CAN BE

CONSIDERED AS A VALID REASON TO APPLY
PROMISSORY ESTOPPEL?

Law
Promissory Estoppel does not create new causes
of action where none existed before. It is a
defence and not a cause of action.
Estoppel is a shield not a sword

Authority

Combe v Combe

Application
The act of the University selling some of its
bungalows to reduce financial problem is not
considered as a valid reason to apply promissory
estoppel because it is regarded as shield not a

MR. DIAZ IS ENTITLED

FOR THE REMEDY

CONCLUSION