HECTOR LLANOS
Project and Contract Management
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Promissory Estoppel

4/11/2014

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As promissory estoppel doctrine acts over the enforceability of a promise protecting “good faith” among negotiating parties (which I think is one of the key concepts supporting commercial development), in the case of a contract modification is acting in the same sense, protecting “good faith” but now regarding contracting parties. Important aspects are that meanwhile in both cases the mutual agreement is required, consideration could not be a requirement for enforceability in the case of a contract modification.  Other important characteristic is that provided that there is not a material change and in a timely manner, a promise could be retracted, and original contract restated previous consideration of preventing any injustice by doing so.

As far as I know, civil law doesn’t have the concept of Promissory Estoppel; nevertheless, the “good faith” principle exists.  What I understand is that, at least in some countries, in practice one of the problems arising from this circumstance is that the system could be too bureaucratic giving sometimes more importance to the form rather than content, even at the time of evaluation other concepts beyond the promise itself could arise such as the balance between parties within the promise.  I also found something interesting, quoting from Nayler (2006): “In English law there is no general duty to negotiate in good faith and therefore a party breaking off negotiations will not, in the normal course of events, incur liability to the other. However, the situation can be different in other systems. The American courts have applied the doctrine of promissory estoppel (…) in the context of contractual negotiations.”

Reference:
Peter Nayler (2006). Business Law in the Global Marketplace. Burlington, MA: Elsevier Butterworth-Heinemann
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