#consideration #contract

FACTS: By a contract of sale, provision was made for payment in Nigerian pounds (£N) in Lagos. However, the buyers asked if the sellers would be prepared to accept pounds sterling in Lagos. The sellers replied, 'payment can be made in sterling and in Lagos'. Pound sterling was then devalued so that it was worth 15 per cent less than £N. The buyers argued that the seller's letter amounted to either a variation (supported by consideration) or a representation that they could make payment in sterling in Lagos on the basis of one pound for one £N, so that the sellers were estopped from going back on it. HELD: It was held by the House of Lords that the sellers' representation was not sufficiently precise either to amount to a variation of the contract terms or found an estoppel. In order to found a promissory estoppel a representation had to be clear and unequivocal, that is, expressed so that it would be understood in the sense required. On the facts, it was not clear whether the sellers were agreeing simply that payment could be made in sterling (without this altering the value of the contract) or whether they were agreeing to tie the value of the contract to Sterling (and, with that, taking the risk that sterling might be devalued).

Woodhouse AC Israel Cocoa Ltd SA and another v Nigerian Produce Marketing Co Ltd [1972] AC 741