Academic journal article Journal of Politics and Law

Enacting Promissory Estoppel into the Malaysian Law: Towards More Certainty in Litigation

Academic journal article Journal of Politics and Law

Enacting Promissory Estoppel into the Malaysian Law: Towards More Certainty in Litigation

Article excerpt

Abstract

Promissory estoppel is an equitable principle meant to prevent any occurrence of inequity or injustice caused by the action of the promisor in backing out from his promise, which initially led the promisee to act to his detriment. This paper discusses the proposal to statutorily enact promissory estoppel into the Malaysian laws, which is based on three reasons: (i) to clearly define its parameters for the easier application by the courts because now that unconscionability is being the main focus in granting promissory estoppel, in lieu of detrimental reliance, the thin line surrounding its parameters are becoming more vague; (ii) to undo its limited interpretation and application as an equitable doctrine that is subject to numerous rules of equity, which may potentially arrest the development of equity and compromise the administration of justice; and (iii) to avoid the statutory restriction imposed by Section 3(1) of the Civil Law Act 1956, which necessitates the reception of this equitable doctrine to be subject to the exclusionary phrase stated in the beginning of Section 3(1) denoting that its application of promissory estoppel in Malaysia can only be carried out only when there is a lacuna in such area of law.

Keywords: statutory enactment, promissory estoppel, malaysian law

1. Introduction

Promissory estoppel is an equitable principle meant to prevent any occurrence of inequity or injustice caused by the action of the promisor in backing out from his promise, which had initially led the promisee to act to his detriment. The origin and meaning of this doctrine was judicially explained by Lord Cairns in Hughes v Metropolitan Railway Co. (1877) 2 AC 439, at page 498, as follows,

"It's the first principle upon which all courts of equity proceed, that if parties who have entered into definite and distinct terms involving certain legal results - certain penalties or legal forfeiture - afterwards by their consent enter upon a course of negotiation which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced, or will be kept in suspense, or held in abeyance, the person who otherwise might have enforced those rights will not be allowed to enforce them where it would be inequitable having regard to the dealing which has thus taken place between the parties."

This definition of what amounts to promissory estoppel has in fact been referred to in many later cases. According to Oxford, estoppel is a rule of evidence or a rule of law, which prevents a person from denying the truth of a statement he has made or from denying facts that he has alleged to exist (Martin, 1986). Such fact must be one that the other person, to whom the statement is made, has relied and acted upon or the one that has caused him to alter his position. In Simm v Anglo American Telegraph Co (1879) 5 QBD 188, Bramwell LJ tentatively suggested at page 203 that estoppel may exist where a person is compelled to admit something that is not true as well as to act upon a theory contrary to the truth. From all the above attempts to describe promissory estoppel, it can be said that promissory estoppel, which falls under the category of estoppel by representation, is applicable when one party to a contract promises the other, either by words or conduct, that he will not enforce his right under the contract wholly or partially. If the other party has acted in reliance of that promise, the person making the promise will be bound by it and pursuant to that, he will not be allowed to sue on the contract.

Traditionally, as an equitable doctrine, the scope of the doctrine of promissory estoppel is limited in many senses, which actually helped to draw its parameters. There are five traditional limitations of promissory estoppel namely:-

(i)Promissory estoppel as a sword, which restricts the application of this doctrine to as far as only to provide a defence to a party and not to be used as a cause of action against another. …

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