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

Court: House of Lords

Facts: Woodhouse AC Israel Cocoa Ltd SA (Woodhouse), the seller, and Nigerian Produce Marketing Co (NPM), the buyer, had a contract for the sale of cocoa. Woodhouse later proposed accepting payment in Sterling instead of the Nigerian Pound, which NPM agreed to. However, the Sterling devalued, and Woodhouse argued that payment should be based on the original rate. NPM contended that payment should be made in Sterling at the current exchange rate.

Issue: Whether a promissory estoppel could be established based on Woodhouse's ambiguous promise to accept Sterling, given the devaluation of the currency.

Held: The House of Lords ruled in favor of NPM, stating that Woodhouse's claim failed. The ambiguity surrounding the promise to accept payment in Sterling undermined the application of promissory estoppel.

Key Judicial Statements:

• Lord Hailsham: Emphasized that for promissory estoppel to be valid, the promise must be clear and unequivocal. An ambiguous statement cannot form the basis for estoppel. If the promise was too ambiguous to vary the contract, it was also too ambiguous to establish an estoppel.

• Viscount Dilhorne: Agreed with Lord Hailsham, asserting that a valid estoppel requires a clear and unequivocal representation.

💡 Leveluplaw: this case highlights that promissory estoppel cannot be based on ambiguous statements. For estoppel to be effective, the promise must be clear and unequivocal. Ambiguous terms fail to provide a solid foundation for estoppel and can lead to disputes regarding their interpretation and application.