Doctrine of Promissory Estoppel

The classic case in respect of economic duress is D. & C. Builders Ltd v Rees [1966] 2 QB 617 (CA). The plaintiff lent a loan of ₤482 to the defendant, yet the defendant had financial difficulties and said that either the plaintiff accepted ₤300 as a full settlement or received nothing at all. Under economic duress, the plaintiff had no choice but to accept the settlement. The Court held that the defendant had to repay the remaining balance. As explained by Lord Denning, since the promise was not freely given, it was under an inequitable state; in other words, the plaintiff had contractual rights on the first promise and the second promise was invalid, so the Doctrine of Promissory Estoppel could not apply. Similarly, in the case of Ernie and Richard, Richard also had difficulties in paying the money in a short time. In spite of that, Richard did not ask for a smaller amount for the full settlement. Hence, there was not any economic duress imposed by Richard. Thus, the Doctrine of Estoppel would still be applied and Ernie's right for the remaining balance was lost.…