contract-law england-and-wales
Why court action would probably be required to enforce the strict legal position so that it would be necessary to initiate proceedings?
<p>Why would you "probably be required to enforce the strict legal position so that it would be necessary to initiate
proceedings", when you can just rely on <em>Tool Metal</em>?</p>

<p>Poole, Shaw-Mellors. <a href="https://www.amazon.co.uk/Contract-Law-Concentrate-Jill-Pool/dp/0198840446/ref=dp_ob_title_bk" rel="nofollow noreferrer"><em>Contract Law Concentrate</em> (4 ed 2019)</a>. p 71.</p>

<blockquote>
  <h3>How is the promissory estoppel brought to an end? Reasonable notice given and notice period has expired</h3>
  
  <p>This issue is complicated by the facts of <em>High Trees</em> since the estoppel in that case was considered
  to turn on the bombing in the Second World War and so came to an end automatically
  when the conditions under which the estoppel operated ceased to exist. However, the HL in
  <em>Tool Metal Manufacturing Co. Ltd v Tungsten Electric Co. Ltd</em> (1955) revived the strict legal
  rights only after the promisor had given reasonable notice of an intention to do so and that
  notice had elapsed.<br>
  &nbsp; &nbsp;  &nbsp;  &nbsp;  It seems safest to demonstrate the giving of reasonable notice as a means of showing fairness
  and that it is no longer inequitable to go back to the strict contractual rights rather than
  assuming that the estoppel conditions have come to an end. <strong>In any event, court action would
  probably be required to enforce the strict legal position so that it would be necessary to initiate
  proceedings.</strong> This is exactly what happened in <em>High Trees</em> [1947].</p>
</blockquote>

<p>I'll outline <em>Tool Metal</em> here. </p>

<p>Paul Davies. <a href="https://www.amazon.co.uk/Smiths-Law-Contract-Paul-Davies/dp/0198807813/ref=dp_ob_title_bk" rel="nofollow noreferrer"><em>JC Smith's The Law of Contract</em> (2018 2 ed)</a>.  p 98.    </p>

<blockquote>
  <p>It is suggested that the preferable view is that promissory estoppel
  can have an extinctive effect as regards existing obligations, but is suspensory as
  regards future obligations. Both these points emerge in the <em>Tool Metal</em> case.<sup>116</sup> <em>Tool Metal</em>
  had licensed Tungsten to deal in certain metals, for which Tool Metal owned the patents,
  in consideration of Tungsten paying a royalty of 10 per cent up to a certain amount
  and, thereafter, 30 per cent. During the war, Tool Metal agreed to waive their right to
  30 per cent and to accept a flat rate of 10 per cent. After the war a dispute arose. Tool
  Metal claimed the waived 20 per cent in respect of material which had been used after
  1 June 1945. In these respects, then, it was exactly like the High Trees case, except that
  the wartime agreement had not terminated. It was held by the Court of Appeal, following</p>
  
  <p><sup>116</sup> <em>Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd</em> [1955] 1 WLR 761.</p>
</blockquote>

<p>p 99.</p>

<blockquote>
  <p><em>Hughes v Metropolitan Railway</em>,<sup>117</sup> that the claim failed. As a result, the existing ‘rights’
  under the contract were clearly extinguished—the extra 20 per cent was lost forever. But
  the contract to pay 30 per cent was still in existence (though waived) and the House of
  Lords held, on the assumption that the waiver was binding (as had been held by the Court
  of Appeal), that <em>Tool Metal</em> could resume their rights to the 30 per cent for the future, by
  giving reasonable notice that the waiver was at an end. Their future rights under the contract
  were only suspended until they had given proper notice that they wished to resume
  them. It seems to follow from this decision that in <em>High Trees</em>, if the landlord had given
  notice during the war that, from a reasonable time in the future (say, three months) he
  wanted the full rent again, he would have been entitled to it; but that, for the periods in
  the past, the balance of the rent was lost for ever. His ‘rights’ for the past rents were extinguished,
  whereas his ‘rights’ for the future rents merely suspended.</p>
</blockquote>

<p><a href="https://www.amazon.co.uk/OSullivan-Hilliards-Law-Contract-Janet/dp/0198807821/ref=dp_ob_title_bk" rel="nofollow noreferrer"><em>O'Sullivan &amp; Hilliard's The Law of Contract</em></a> (2018 8 ed). p 117.</p>

<blockquote>
  <p>5.84 First, does promissory estoppel extinguish the creditor’s rights or merely suspend them
  until revived by notice? The most common view in cases and commentary is that promissory
  estoppel is merely suspensory. After all, the landlord in <em>Hughes</em> was allowed to
  reactivate the six months’ repair period by giving the tenant the appropriate notice.
  Moreover, the House of Lords took the same view in <em>Tool Metal Manufacturing Co v
  Tungsten Electric Co</em> (1955), the first case on promissory estoppel to reach the House
  of Lords after High Trees. Here, TM granted TECO a licence in 1937 to deal with hard
  metal alloys which they had patented. The licence agreement provided for TECO to pay
  ‘compensation’ to TM in any month if they sold more than a stated quantity of the alloys.
  When the war broke out, TM agreed to forgo the contractual compensation and none
  was paid after the end of 1939. In 1944 negotiations for a new agreement broke down
  and, in an action brought the following year by TECO for breach of the licence agreement,
  TM counterclaimed that compensation was again payable from 1945 onwards (as
  in <em>High Trees</em>, no claim was made for the war years). The Court of Appeal held that TM
  could withdraw the concession not to claim the compensation by giving reasonable notice
  to TECO. In a subsequent action, <strong><em>the House of Lords confirmed that the serving of
  the counterclaim was itself sufficient notice to restart TECO’s obligation to make compensation
  payments [Inaki Viggers quoted this in his answer below.]</em></strong> (in fact, from 1947 onwards).</p>
</blockquote>

<p>Strict legal position by definition means the original contractual position.  That is clear from the fact that the party seeking to rely on the strict legal position must be the same party that is required to provide reasonable notice, as the passage suggests.  Strict legal position cannot mean promissory estoppel and is used to distinguish the (equitable) estoppel position.  The requirement of court action is obviously a good practical point, should the promisee deny any obligation to revert to the strict position.  “Probably” is appropriate because, of course, it may be that the promisee does consent to reverting to the strict position, but given that it is likely to perceive that it has an agreement with the promisor as to the amended payment or other obligation (whatever the subject of the promise), in practical terms it is often unwilling to do so.  High Trees supports this point (and, tellingly, it is High Trees, not Tool Metal, cited in support).  But the passage makes clear that court action is not <em>necessary</em> as a matter of law and that reasonable notice will suffice.</p>

<blockquote>
  <p>Why would you "probably be required to enforce the strict legal position so that it would be necessary to initiate proceedings", when you can just rely on <em>Tool Metal</em>?</p>
</blockquote>

<p>The quote in bold is sloppy and pointless:</p>

<ol>
<li>It is not clear whether by "strict legal position" the authors (specifically Poole &amp; Shaw-Mellors) meant <em>contractual rights</em> as opposed to <em>promissory estoppel</em>;</li>
<li>it mentions "initiate proceedings" without specifying "proceedings" <em>for what</em> (that is, for enforcement of contract? or of promissory estoppel?);</li>
<li>the quote altogether makes the absurd "point" that court action is <em>probably necessary</em> for initiating proceedings (the term "probably" renders the quote uncertain and meaningless); or, in the alternative,</li>
<li>the authors state the obviety that "<em>it would be necessary to initiate proceedings</em>" in order "<em>to enforce [in court] [a] legal position</em>".</li>
</ol>

<p>Most important, the quote can be safely ignored. The key points are:</p>

<ol>
<li>The safest approach for defeating a claim of <em>promissory estoppel</em> and reinstating contractual rights consists of (1) notifying the counterparty, and (2) giving a reasonable period for that counterparty to adjust to the announced reinstatement; and</li>
<li>The reinstatement is not retroactive, which is why the text characterizes waivers as "<em>suspensory as regards <strong>future</strong> obligations</em>" (emphasis added).</li>
</ol>

<p>Perhaps the authors mistakenly stuck with the notion of "<em>probably necessary [court action]</em>" due to the conclusion by the House of Lords that "<em>the serving of the counterclaim was itself <strong>sufficient</strong> to restart TECO's obligation</em>" (emphasis added), to quote the last sentence of your extract from <em>O'Sullivan &amp; Hilliard's The Law of Contract</em>.</p>

<p>However, the difference between <em>necessary</em> and <em>sufficient</em> is obvious: TM satisfied the element of notice of reinstatement (the notice being in the form of a counterclaim), but that is different from the authors' notion that such notices <em>have</em> to be in the form of filing claims (or counterclaims) in court. Or maybe the authors wrote "probably" as a wildcard, in which case it would be more concise to omit the convoluted statement altogether.</p>
