Question

1. Alan owes Brian HK$5,000, which is due on 31 March. On 15 March, he sought Brian’s consent to accept a lesser sum of US$600 on 24 March (i.e., one week in advance of the due date) to discharge the whole debt. Brian agreed to this arrangement. Alan then made a bank loan of US$600 at an annual interest rate of 5% with a view to paying Brian. Today is 24 March, Brian has now changed his mind. He insists to revert to the previous position of full payment HK$5,000 to be paid on 31 March. Advise Alan if his part payment is able to discharge the whole debt in such case. [ Discuss the doctrine of promissory estoppel.]

2       Milky entered into a contract for the hire of 6 rooms in New Castle Hotel in    Kowloon West. The purpose of the contract was to watch the fireworks gala in the Victoria Harbour on the 1st July (Reunification Day) through the windows of the rooms. Milky planned to invite her close friends and their families to stay in the 6 rooms to enjoy the fireworks. Just two hours before start of the fireworks, the Hong Kong Police Force received a serious threat from some terrorist organizations that they would launch large scale attack to the crowds who gathered to watch the fireworks. The Hong Kong Government immediate ordered the cancellation of the fireworks and gave an order that this kind of gala will not be launched at least for five years. Milky, having already paid a deposit, refused to pay the balance of the room charges. The hotel took legal action to recover the balance.

        

Required:

Analyse the chance of success by the hotel and explain in detail the legal principles that you base on for analysis.

3      Devil Computers Ltd (DCL) produces hard disks for installing in computers. The Hong Kong Land Bank (HKLB) would like to purchase new computers for its new computer room situate at the fourth floor of its headquarters in Homantin. HKLB asked DCL for their hard disks which could survive in good conditions for at least 3 years. DCL sold some of their “long life” hard disks to HKLB.

         In fact, the “long life” hard disks only survived for 6 months and the staff of HKLB complained about the performance and quality of the hard disks.

Required:

Advise whether HKLB could claim damages and repudiate the contract of sale with DCL under the provisions of the Sale of Goods Ordinance. Detail explanation of that specific provision is necessary.     

Answer 1

ANSWER 1

As per contract law, promisory estoppel binds the individual for the promise he make with an intension to create a lawful relationship with person to whom he is making. In this concept, it is not allowed to be going back from his words because it is against the equity. There are 2 parties promissor ( who make promise ) and promisse (to whom promise is made ). promisse can recover damges from the promisor incurred due to promise.

Principle of Promissory Estoppel doctrine is based on the principles of justice,fair play as well as a good conscience.This principle is intended to stop the promisor from arguing that an underlying promise should not be legally upheld or enforced.

In above case, Alan offers new term of accepting lesser sum of $600 to which Brian agrees. After mutual arrangement, Alan arranges bank loan at an interest rate 5% but later on Brian changed his mind. In such case, the principle of promissory estoppel can be applied and Alan can recover damages (if any) occurred to him due to his cancellation of revised arrangement and Brian is bound to pay him the damages which happened to Alan due to his actions.