Promissory Estoppel
/prəˈmɪsəri ɪˈstɒpəl/
Legal Doctrine / Equitable Principle
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Definition
A doctrine that prevents a party from going back on a clear and unambiguous promise where the promisee has relied on that promise to their detriment. Even without formal consideration (the technical requirement of contract formation), a promisor will be held to their promise if the promisee changed their position in reliance on it. In India it is applied against the government where it would otherwise exercise its rights contrary to equity.
Etymology
Legal term with origins in Latin, Anglo-French, or Old English legal tradition, later codified in Indian law.
Examples
Case Study
The leading Indian case is Union of India v. Anglo Afghan Agencies (1968), where a government circular promising export incentives was later withdrawn. The Supreme Court held that the government was estopped from going back on its representation to exporters who had acted in reliance. Justice Shah held that in India, unlike in England, promissory estoppel can be used as a sword (cause of action) not just a shield.
Key Cases
Union of India v. Anglo Afghan Agencies
1968AIR 1968 SC 718
The foundational Indian authority on promissory estoppel against the government. Held that the government cannot resile from a representation that induced parties to act to their detriment. Promissory estoppel can be a cause of action in India.
View on Indian Kanoon →M.P. Sugar Mills v. State of U.P.
1979AIR 1979 SC 621
Extended promissory estoppel to government policy commitments. Held that where government representation induces industry to invest, the government is bound by the representation unless overriding public interest demands departure — and even then compensation may be payable.
View on Indian Kanoon →Central London Property Trust v. High Trees House
1947[1947] KB 130
Lord Denning's foundational promissory estoppel case. A landlord who promised reduced rent during wartime was estopped from claiming the full amount for the duration of the promise.
View on BAILII →