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Malayan Law Journal Articles/2006/Volume 6/PROMISSORY ESTOPPEL: DOES MALAYSIA NEED THIS
DOCTRINE?
[2006] 6 MLJ lxviii
Malayan Law Journal Articles
2006

PROMISSORY ESTOPPEL: DOES MALAYSIA NEED THIS DOCTRINE?

Prof Dr Ali Mohammad Matta
Ahmad Ibrahim Kulliyyah of Laws International Islamic University Malaysia
Introduction
The doctrine of promissory estoppel has a long but chequered history 1. Its origin lies in an urge of the English
common law to bring about equity in matters of contractual obligations, even though it has outgrown its basic
purpose. English law at times faced situations where it could not provide just solutions under the exiting
principles of the law of contracts. This was particularly so when a release from contractual obligations, not in
the form of a deed, or an accord without consideration was rejected by the courts as unenforceable. One
reason for the failure of English law in this respect was its obsession with the rule of consideration in
contracts. The harshness became acute when the application of the doctrine of consideration, which was
primarily meant for the making of contracts, was extended to the discharge of contracts as well. This gave
rise to inequities in situations where a party was recalled to perform his contractual obligations after having
been gratuitously released from the same. The doctrine of 'accord and satisfaction', which was evolved under
common law to mitigate the position, could not achieve the desired results, as with its limited scope it could
not apply in the absence of consideration. This doctrine proved too narrow to cover all bilateral alterations in
contractual obligation. The lacuna was filled up by the common law doctrine of waiver, which relieved English
law of many of its inadequacies in the field of discharge of contracts. However, in spite of a sufficiently broad
doctrine of waiver under English common law being handy to them, the courts looked towards equity in
search for a wider principle as a tool for them to achieve justice where other forms of discharge of contract
failed. The answer was found in the doctrine of promissory estoppel.
Apparently, the Malaysian law of contracts does not suffer any inadequacy in the area of discharge of
contract, as s 64 of the Contracts Act 1950 provides for a broader principle of 'waiver' or 'remittance' of
contractual obligation(s). Under s 64 there is apparently no room left for the reception of the doctrine of
promissory estoppel in Malaysia, as the two
6 MLJ lxviii at lxix
doctrines aim at the same object viz., of achieving equity and fairness in matters of discharge of contractual
obligations. It may also not be in tune with the mandate of the Civil Laws Act 1956, to adopt English legal
principles when appropriate statutory provisions are present under the Contracts Act 1950. As against that
the Malaysian courts have not only frequently resorted to it to do justice in varying fact situations, but have
greatly contributed in the development of the doctrine of promissory estoppel with no inhibitions whatsoever
in liberating this doctrine from its traditional shackles. Recent cases in Malaysia have shown that the
Malaysian courts are now more than willing to apply this doctrine even to the extent of disclaiming some of its
founding requirements.
Is there a real need to invoke the doctrine of promissory estoppel in Malaysia in the face of the doctrine of
'waiver' under s 64 of the Contracts Act 1950? Are the provisions of s 64 not enough wide to cover those
cases in which the courts felt the necessity of invoking the equitable doctrine of promissory estoppel? The
aim of this paper is to attempt an answer to these questions, which would require a short excursion into the
requirement of consideration and various methods of discharge of a contract including by 'accord and
satisfaction', 'waiver' and promissory estoppel.

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Requirement of Consideration
It would not be inappropriate to very briefly look into the doctrine of consideration as a requirement for a
contract to be enforceable. It is this doctrine, which furnished the ground for the development of various
common law and equitable rules paving way, inter alia, for the gratuitous but effective discharge of contracts.
The obsession of English law with the requirement of consideration in contracts may have all the justification
in the world but an indiscreet adherence to the rule would have left common law unproductive but for its
constant search for newer rules to mitigate its harshness 2. Although the doctrine of consideration was
understood as applicable in the formation of contracts, but despite serious objections, it was extended also to
the field of discharge of contracts. Thus, in order to be effective, any discharge of a contract by release
otherwise than by deed, or a discharge of contract by variation, by accord and satisfaction or even by waiver
by agreement, had to be supported with consideration. The requirement of consideration is
6 MLJ lxviii at lxx
nevertheless dispensed with in cases of discharge by 'waiver by estoppel' or better called as 'estoppel by
waiver'.
The harshness of the rule has been partially obviated by defining 'consideration' in terms of 'something'. The
definition of consideration couched in such a vague but liberal expression reflects the regard for freedom of
contract by not insisting on a certain quantum of consideration such as the 'market value' or 'due value',
provided that the parties have contracted with free consent. This is further fortified by explanation 2 to s 26 of
the Malaysian Contracts Act 1950 under which an agreement to which the consent of the promisor is freely
given is not void merely because the consideration for it is inadequate.
The courts have also contributed by putting a liberal interpretation on 'consideration' as a requirement for a
contract. The courts regard anything, which has some value in the eyes of law as good consideration, which
may not be adequate. The adequacy of 'consideration' would not be questioned if fixed voluntarily by a free
agreement of the parties. The adequacy of 'consideration' is for the parties to consider at the time of making
the agreement, not for the court when one seeks to enforce the agreement 3. Consideration need not be equal
to the actual market value4, but it should have some economic value without being illusory 5.
Discharge of contracts
Discharge of contracts other than by performance, may be necessitated in various kinds of post-contract
situational changes. It is a natural indulgence in the business world, at times beyond human control, for
which legal regulation is required. Under English common law discharge is permissible by 'release', 'accord
and satisfaction', 'compromise', or 'waiver'. The parties can also freely vary the terms of their contract by
agreement. However, these modes of discharge are not free from their limitations and requirements,
particularly the requirement of consideration. Except in cases of release by deed and by waiver,
'consideration' is a requirement for all other modes of valid discharge. The requirement of 'consideration' may
sound good in as far as it creates an aura of seriousness around contract business but it would set asunder
all efforts for a just solution in situations where, known to the promisee, the promisor, without being
dishonest, is unable to fully perform his promise. The promisee might, on compassionate grounds, promise
not to enforce performance of his contractual obligations by the promisor or to put them in abeyance or agree
to variation in their performance. An indiscrete insistence on the requirement of consideration in such cases
of discharge would result in inequity.
6 MLJ lxviii at lxxi
The English doctrine of Accord and Satisfaction
Under English law strict adherence to the doctrine of consideration in contracts gave rise to injustice in cases
where there was a voluntary discharge of one party from his contractual obligations, by the other, without
furnishing a fresh consideration. Such discharges were not enforceable by the courts as these did not fit into
the pigeonhole of a valid contract for want of consideration. This gave rise to hardships. These hardships
were sought to be removed through the common-law doctrine of 'accord and satisfaction' evolved by the
courts more than 400 years ago6.
Accord and satisfaction has been defined as the 'purchase of a release from an obligation', whether arising

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from contract or from tort, by means of any valuable consideration not being the actual performance of the
obligation. The accord is the agreement by which the obligation is discharged and the satisfaction is the
consideration, which makes the agreement operative 7. However, this English common law doctrine of 'accord
and satisfaction' has a limited in its application, as it does not cover all bilateral alterations in contractual
obligations in the absence of consideration. Even bilateral alterations supported by consideration may not
always satisfy the 'accord and satisfaction' rule unless the consideration meets the creditor's claim in full 8.
Moreover, 'accord and satisfaction' is sometimes restricted to settlements after the breach of the contract. It
is said that accord is an agreement made after the breach whereby some consideration other than his legal
remedy is to be accepted by the party not in fault, followed by performance of the substituted consideration 9.
6 MLJ lxviii at lxxii
Unlike s 64 of the Malaysian Contracts Act 1950, the English rule of 'accord and satisfaction' is based on the
premise that under English law a parol release without consideration is nudum pactum 10. The limitation of this
rule was acknowledged in Pinnel's case11. itself in which it was settled that a lesser amount cannot be a
satisfaction to the plaintiff for a greater sum because it is normally insufficient to affect a discharge at law or
even in equity12. It is for this reason that under the English rule of 'accord and satisfaction' a creditor might
accept anything in satisfaction of his debt except a lesser amount of money 13. The Pinnel's14rule has received
affirmation of the House of Lords in Foakes v Beer15. Thus, the limited scope of the rule left no possibility for a
bilateral accord and satisfaction between the parties, which could prevent the creditor from claiming the full
amount from the debtor after having agreed to accept a smaller amount in full satisfaction of his claim.
The rule of 'accord and satisfaction' has not served a useful purpose and the English judges have expressed
their discontentment with the rule and have shown a desire for its modification. Jessel MR in his appraisal of
the rule in Couldery v Bartrum16said:
...according to English Common Law a creditor might accept anything in satisfaction of his debt except a less
amount of money. He might take a horse, or a canary, or a tomtit he chose, and that was accord and
satisfaction but, by a most extraordinary peculiarity of the English Common Law, he cannot take 19s. 6d. in
the pound.
6 MLJ lxviii at lxxiii
The Earl of Selborne LC thus expressed his view about the rule in Foakes v Beer:
It would be an improvement in our law, if a release or aquittance of the whole debt on payment of any sum
which the creditor might be content to receive by way of accord and satisfaction (though less than the whole)
were held to be generally binding17
Even the Law Revision Commission of England recommended the abolition of the rule but no legislative
initiative appears to have been taken in this regard.
Doctrine of Waiver
As against 'accord and satisfaction', the doctrine of 'waiver' embodies a broader principle under which a party
to a contract may be discharged from his contractual obligations even without furnishing any consideration.
The promisee may, before the breach, gratuitously release the promisor from the obligation to perform the
promise, or, after the breach, gratuitously release the promisor from his liability arising on such breach.
Initially the doctrine of 'waiver' was developed by judges under common law mainly as a device for evading
the formal requirements of the Statute of Frauds, which enacted that a contract required to be evidenced by
writing, could only be altered or varied by a subsequent contract similarly evidenced 18. However, under
English law 'waiver' has come to be a general term used to describe the operation of a number of principles
or concepts. Waiver, which is essentially a common law concept, is extremely complex as it involves the
elements of equity with which it has a great deal of commonality. For this reason there is an apprehension
that any attempt to define or describe the concept of waiver comprehensively is doomed to failure 19.
Doctrine of waiver is based on the premise that 'it is always open to a party to waive a condition which is
inserted for his benefit'20. It is a situation
6 MLJ lxviii at lxxiv
where the promisee has dispensed with his contractual rights or remedies. To dispense with means to waive
and that amounts to the abandonment of his contractual rights by the promisee 21. The party waiving his right

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is giving away to him rather than taking anything from the other.
Denning LJ spelt out the requirements of waiver as follows:
In order to constitute a waiver there must be conduct, which leads the other party reasonably to believe that
the strict legal rights will not be insisted upon. The whole essence of waiver is that there must be conduct,
which evinces an intention to affect the legal relations of the parties. If that cannot properly be inferred, there
is no waiver22.
These requirements are not in dispute and are markedly identical with those prescribed for the equitable
doctrine of promissory estoppel.
Distinction appears to be drawn sometimes between a gratuitous and non-gratuitous waiver so for as their
consequences are concerned. If a waiver is supported by consideration, it is contractually binding and new
rights and obligations arise. If it is not supported by consideration, it may not irrevocably alter the rights of the
parties, but may be retracted for the future, at least on reasonable notice 23. This is attributed to the source of
waiver, which rests either in agreement or in quasi estoppel24. However, this description of waiver does not
account for those cases where there is absolute abandonment of obligations and where it would be
impossible or inequitable to retract waiver25.
The description of 'waiver' by Salleh Abas FJ in Cheng Chuan Development Sdn Bhd v Ng Ah Hock is a
correct reflection of the present position of this common law doctrine. The learned Federal Court judge said:
6 MLJ lxviii at lxxv
... Such relaxation of a term of the contract, although made orally, has been held by the judges to be
efficacious so that the party who gives indulgence can no longer go back on his words, despite the fact that
the efficacy of such indulgence being gratuitous, is, as a matter of legal theory questionable; it being against
the doctrine of consideration and also there being no real distinction which could be found between variation
and waiver. These theoretical objections lead textbook writers to suggest that waiver, as a matter of principle,
should rest upon equitable principle of promissory or quasi estoppel 26.
Doctrine of Waiver in Malaysia
Malaysian Contracts Act 1950 contains a broader rule of 'waiver' or 'remittance' under s 64, which provides:
Every promisee may dispense with or remit, wholly or in part, the performance of the promise made to him,
or may extend the time for such performance, or may accept instead of it any satisfaction, which he thinks fit.
Certainly this rule of 'waiver' and 'remittance' is much wider in scope than the English doctrine of 'accord and
satisfaction' if not the English doctrine of waiver. Under s 64 the promisee may dispense with or remit the
performance of the promise by the promisor either wholly or in part, or he may extend the time for the
performance or accept any satisfaction for the performance of the promise. Hence, the promisee may, either
against some consideration or gratuitously waive or remit or abandon or forbear all or some of his rights
under a contract. The Malaysian courts have also taken a liberal view of 'waiver' by giving it its natural
meaning and interpreting it broadly on the lines of Indian approach. Abdul Aziz J in the Federal Court case of
Kerpa Singh v Bariam Singh observed:
... this section materially alters the English doctrine of accord and satisfaction...it has been held that this
section cannot be enlarged by any implication of the English doctrine and English authorities would therefore
be misleading. In India they have apparently been scrupulously avoided 27.
The Federal Court in Pan Ah Ba & Anor v Nanyang Construction Sdn Bhd described waiver as under:
...in order to constitute a dispensation of a promise [under s 64]...,neither consideration nor an agreement is
necessary provided, of course, that it is clear from the
6 MLJ lxviii at lxxvi
evidence that the promisee has so dispensed with the performance of the promise by a voluntary conscious
act and it must be an affirmative act on his part28.
This description of waiver is not any far from the description of promissory estoppel. On the contrary it
depicts uniformity of the two doctrines in the matter of dispensation of contractual performance by one party
without any consideration from the other.

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The Supreme Court of Malaysia considered the scope of s 64 in Associated Pan Malaysia Cement Sdn Bhd
v Syarikat Teknikal & Kejuruteraan Sdn Bhd29. Although the main thrust of the court in this case was again on
a comparison between the Malaysian doctrine of 'waiver' under s 64 of the Contracts Act 1950 and the
common law doctrine of 'accord and satisfaction', the wide scope of 'waiver' in Malaysia becomes evident in
the words of Gunn Chit Tuan SCJ when he observed:
... s 64 of our Contracts Act 1950 ... represents a departure from the common law in England. Our law on
waiver in s 64 ..., is similar to the Indian law on the general principles of waiver under which it is open to a
promisee to dispense with or remit wholly or in part the performance of the promise made to him or he can
accept any promise which he thinks fit. Under our law neither consideration nor an agreement will be
necessary30.
6 MLJ lxviii at lxxvii
Waiver was applied in the recent Court of Appeal case of Seal Incorporated Bhd v Norsechem Resins Sdn
Bhd31 to prevent the respondent from claiming the balance of RM535,781 and the interest thereon after
having accepted and cashed the cheque for a lesser but agreed amount as 'full and final payment of a larger
judgment sum' without any protest.
From a perusal of the cases it is found that the Malaysian courts have generally taken a liberal view of the
doctrine of waiver and have given it its natural and wide meaning except perhaps in the case of Cheng
Chuan Development Sdn Bhd v Ng Ah Hock, in which Salleh Abas FJ appears to place it under unnecessary
and unnatural limitations. In the words of Salleh Abas FJ:
Waiver is a vague term and according to Lord Hailsham it is not a term of art (Banning v Wright [1972] 1
WLR 972, 981). In its application in the law of contract the word is commonly used to describe a concession
or indulgence voluntarily granted by one party to the other for the convenience and at the request of that
other party by not insisting upon the precise mode of performance provided in the contract (Halsbury's Laws
of England Vol 9 (4th Ed) para 572). A waiver thus deals with the mode of performing the contract. It does not
excuse the party to whom indulgence is granted from performing it altogether. A waiver is given without any
consideration at all ... . Waiver only operates to excuse strict performance of a contract or only its mode of
performance. It does not extend to freeing of the party at fault from performance altogether 32.
It is felt that this view puts uncalled for limitation on the doctrine of waiver as contained under s 64, which
expressly allows promisor to dispense with or remit wholly or in part the performance of the promise made to
him. Further, such an interpretation does not take into account waiver against consideration as it speaks only
of gratuitous waiver. It also does not account for the cases where there is absolute abandonment of
obligations making it impossible or inequitable to retract waiver 33.
Promissory Estoppel
Promissory estoppel is based on a general principle of equity under which a party, who has represented that
he will not insist upon his strict rights under the contract, will not be allowed to resile from that position,
except in certain cases by giving reasonable notice of his intention to revert to the original position. The
doctrine of promissory estoppel was evolved in England during 19th century followed by further development
thereafter34. In its primitive
6 MLJ lxviii at lxxviii
years the doctrine was tied down in its traditional requirements. It was required for its application that, (a)
there should be a contractual relationship between the parties, (b) one of whom has made a representation
of fact, (c) with the intention that the person to whom the representation is made shall believe it and act upon
it, (d) that the other person believes the representation and acts upon it, (e) that by relying and acting upon
the representation the other person has altered his position to his detriment and (f) it would be inequitable for
the court to allow the person making the representation to go back on it.
In its early days, the courts insisted on the satisfaction of all these requirements for a person to successfully
invoke the doctrine of promissory estoppel. Furthermore, the doctrine of estoppel was confined in its
application as a defence and was not allowed as a cause of action. In the process of its development the
doctrine was constantly shaped and re-shaped35. The later years of its development saw the rule reformed
and liberated from most of it traditional requirements.

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English courts in their typical mindset initially adopted a conservative approach towards this equitable
doctrine by strictly adhering to its pre-conditions, as a consequence of which relief was denied even in
deserving cases because one or the other traditional requirements of this doctrine was not satisfied 36. The
other common law jurisdictions have been more pro-active and have liberated this doctrine of its traditional
limitations. In this regard, the Australian courts took a leap forward in the case of Walton Store
6 MLJ lxviii at lxxix
(Interstate) Pty Ltd v Maher & Anor37. In this case, negotiations for a lease agreement between the parties
induced the lessor to honestly believe that the lease agreement would be concluded. On that belief the lessor
incurred huge expenses on the direction of the lessees. The High Court of Australia applied estoppel even
when there was no concluded lease agreement. The court held that the lessees were responsible for not
having removed the fallacious impression of the landowners that there was a binding contract. The court
found its judgment on the ground that the lessees induced the landowner to adopt a belief and assume that
the exchange of contracts would take place.
In India the courts proved to be more forward looking in liberating the doctrine of promissory estoppel from its
traditional limitations38. The alteration of position by one party in reliance upon the representation of the other
is considered to be the only requirement for the application of promissory estoppel. It is no more required to
prove detriment or damage or prejudice to the party asserting the estoppel 39. Promissory estoppel, there, has
even been held as capable of creating new and independent rights.
The Malaysian courts have not lagged behind in their endeavour to further develop the doctrine of
promissory estoppel. The Federal Court in the case of Boustead Trading (1985) Sdn Bhd v Arab -Malaysia
Merchant Bank Ltd40 found no justification in denying this equity to the plaintiff in defending a cause of action
which would otherwise have been lost to him by some plea of the defendant. The court stated the principle in
broad terms when it said:
The doctrine of promissory estoppel is a flexible principle by which justice is done according to the
circumstances of a case. It is a doctrine of wide utility and has been resorted to in varying fact situations to
achieve justice. The Federal Court held that 'the global question, which a court must ask itself, is this: is it just
and equitable that the particular litigant (against whom the estoppel is raised) should succeed, given the
totality of the facts and circumstances of the case? If the answer
6 MLJ lxviii at lxxx
to the question is in the affirmative, estoppel does not bite: if the answer is in the negative, then it bites'. The
doctrine of promissory etoppel has been developed with a rapid speed such that it can now be used in
almost any imaginable situation41.
Waiver v Estoppel
What then is the difference between the two doctrines of 'waiver' and 'promissory estoppel'? Could all those
cases, which were decided by applying the doctrine of promissory estoppel, particularly in Malaysia, be
decided under s 64 of the Contracts Act 1950 by applying the doctrine of waiver?
There are two points of view in answer to this question. One view is that these two doctrines essentially
represent the two sides of the same coin. The other view is that these two doctrines are essentially different
from each other with different fields of operation.
Similarities between Waiver and Promissory Estoppel
There are great similarities between the two doctrines of promissory estoppel and waiver. The two are same
in their definition42. In both, no consideration is required. The rights gratuitously waived can be revived, if
possible, by giving reasonable notice in the same manner as can be done in respect of rights put in
abeyance under promissory estoppel43. Lastly, like promissory
6 MLJ lxviii at lxxxi
estoppel, waiver can only be used as a shield and not as a sword 44. Waiver by estoppel has been claimed as
being analogous to, or even identical with the promissory estoppel 45. Waiver is one instance of promissory
estoppel although promissory estoppel is wider among the two 46. Treitel views the doctrine of promissory
estoppel as having closer affinities with the common law rules of waiver, as compared to estoppel by
representation, in the sense of forbearance. According to him in many later cases, both waiver and
promissory estoppel are treated as substantially similar doctrines, which are often used interchangeably 47.

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Like promissory estoppel, waiver also has been described as a flexible concept. It has often been used 'as a
means of relieving parties from bargains or the consequences of bargains, which are thought to be harsh or
deserving of relief48. Waiver is a general term used to describe the operation of a number of principles or
concepts. In the context of contractual rights the chief concepts are election (between inconsistent rights with
knowledge) and estoppel. Thus estoppel is ranked as one instance of waiver.
The promissory estoppel cases, so it is said, are, the counterpart in equity, and are better described as being
cases of equitable forbearance49. Waiver is related to, if not a species of, promissory estoppel 50. McKendrick
notes a close relationship between the doctrine of waiver and promissory estoppe 51. These opinions of legal
luminaries make clear the similarities between the two doctrines of waiver and promissory estoppel.
Differences between Waiver and Promissory Estoppel
Despite great similarities between the two doctrines of waiver and promissory estoppel, the differences
between them have not gone unnoticed. It may be said that the present day estoppel, shorn of its traditional
requirements, covers situations which may not be within the ambit of waiver. Waiver is confined to pure
contractual situations whereas relief has been granted under promissory estoppel even where no contract
had been reached between the
6 MLJ lxviii at lxxxii
parties. In the case of promissory estoppel not only the requirement of pre-exiting contractual relationship
has been dispensed with but, the doctrine has been applied even in the absence of any legal relationship 52.
The courts have remained divided on the issue of uniformity between the two doctrines of waiver and
promissory estoppel. In Brikom Investments Ltd v Carr53, the judges of the English Court of Appeal remained
divided, as they perceived some real differences between waiver and promissory estoppel, which they
vehemently maintained in their separate judgments. It was debated whether the case fell under promissory
estoppel or waiver. This was a case where the landlord would repair the premises and generally charge the
tenants for contribution. Before entering into a tenancy agreement with the defendants the landlord made
representations that the cost of repairs would not be claimed from them. The landlord's claim against the
tenants, for the cost of repair, failed. Lord Denning decided the case on the basis of promissory estoppel
because according to him '... although in strict law she had no answer to the landlords claim for a
contribution, she was entitled, nevertheless, to assert by way of defence that the landlords were stopped
from making any claim against her because of the representations made to her, since the principle of
promissory estoppel extended to all cases where a party to whom a representation or promise had been
made, had in fact relied on it, whether by acting on it, by altering his or her position on the faith of it, by going
ahead with a transaction under discussion between the parties or by any other form of reliance on it' 54.
However, Roskill and Cumming-Bruce LJJ (Lord Denning concurring) also decided the same way but they
did so by applying the doctrine of waiver. They found promissory estoppel inapplicable to the case 55. Roskill
LJ was more forceful in rejecting the application of promissory estoppel in this case and agreed with Sir
Alexander Turner's criticism of Denning MR for applying that principle in Crabb v Arun District Council 56,
which according to Sir Alexander Turner 'was really an acquiesence case ...'.
6 MLJ lxviii at lxxxiii
Another difference is drawn on the proof of reliance on the words or conduct of the representor, and
detriment caused thereby to the representee, which, although crucial to waiver in the sense of estoppel is not
required for waiver in the sense of election57. However, this proposition has been accepted with a pinch of
salt58. It has been emphatically stated that detriment to the representee is not a requirement for the
application of promissory estoppel59.
A difference of some real concern is sometimes pointed out in the sense that unlike waiver estoppel is an
equitable remedy, which is not mandatory but only discretionary. It has been said that '... it is often forgotten
that the granting of equitable remedies are discretionary and as such it does not necessarily follow that the
courts will make an order for such relief in every case where equitable relief was available. The courts, in
exercise of their discretion, may only grant such a relief if the circumstances of a particular case warrant the
exercise of their discretion to grant the relief sought 60. This point has also been drawn home by Laughlan by
describing equitable remedies as discretionary, which it is not compelled upon the courts to grant as
compared to common law remedies61. The two doctrines have also been advised to be kept apart because '...
a mingling of the application of equity and common law would be unfair to litigants, as the principles and

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application of equity would be unclear ... More importantly, the mingling of equity and common law would
decrease the use of equity by the judiciary, potently arresting equity's development and compromising the
administration of justice'62.
Reception of Promissory Estoppel in Malaysia
The reception of promissory estoppel in Malaysia has to be studied in the light of s 64 of the Contracts Act
1950, which contains a specific provision embodying the doctrine of waiver and s 3 of the Civil Laws Act
1956, which permits application of English common law only when there is no specific provision in the
domestic laws of Malaysia. Hence the question whether there is a real need for the doctrine of promissory
estoppel to be received and applied in Malaysia and whether the same is permissible in the face of s 64 of
the Contracts Act 1950?
6 MLJ lxviii at lxxxiv
Over the year, Malaysian law has grown in relation to all fields of life and honest attempts have been made
by the judiciary to develop its own jurisprudence, particularly in those areas where local consideration would
not admit of the adoption and application of the laws of alien systems. Malaysia's reliance on foreign legal
precedent has gradually lessened. This is evidenced by the views of Malaysian legal luminaries. His Royal
Highness Raja Azlan Shah, a distinguished judge and juristic has expressed the view that in the present day,
there should no longer be any reliance on English law by virtue of the Civil Law Act 1956 because throughout
the years of applying these laws, which went through modification and adaptations to suit local conditions,
they have become Malaysian common law. As a consequence, almost every branch of the law in Malaysia
has been developed whilst some have been enacted into legislation and thus, the application of ss 3 and 5 of
the Civil Laws Act presently are limited63.
Late Ahmad Ibrahim, a distinguished jurist and academic, held the view: 'It is clear that as the law is
developed in Malaysia through legislation and judicial decision, there will be less and les need to rely on the
English law to fill lacunae in the law64.
Sinadurai's views on the rules of equity may be more relevant to the present discussion when he says that
the application of an equitable rule is subject to an important limitation, ie, if a statutory provision has been
passed to modify or abrogate such equitable rule, it will automatically be overridden 65. Here, one needs to go
into the genesis of s 64 of the Contracts Act 1950 in order to find out whether it was intended to modify or
abrogate the equitable doctrine of promissory estoppel. However, the speed with which this equitable
doctrine is applied in Malaysia does not suggest its abrogation.
It is no exaggeration that the doctrine of 'waiver' under s 64 of the Contracts Act 1950 is an equity-based
statutory principle aimed at bringing about fairness and justice in contracts. Deriving its sap and spirit from
the broader principle of 'unconscionability' this doctrine is self-sufficient to make the law of discharge of
contracts conscionable. Limiting its scope artificially and unnecessarily would defeat its purpose. Perhaps it
may not be wrong to
6 MLJ lxviii at lxxxv
say that like the doctrine of promissory estoppel, which had the capacity and strength to release itself from
its traditional chains and grow into a flexible doctrine, the doctrine of waiver too does not lack in texture and
flexibility to blossom to its full capacity. This would help achieve just results in all deserving cases of
discharge of contract. After all, equity is a watchdog to ensure that the object of the law is not lost in its
technicalities. The role of equity can no better be explained than in the case of Lord Dudly and Ward v Lady
Dudley:
... now equity is no part of law, but a moral virtue, which qualifies, moderates, and reforms the vigour,
hardness and edge of the law, and is a universal truth; it does also assist the law where it is also defective
and weak in the constitution (which is the life of the law) and defends the law from crafty evasions, delusions,
and new subtleties, invented and contrived to evade and delude the common law, whereby such as have
undoubted rights are made remediless; and this is the office of equity, to support and protect the common
law from shifts and crafty contrivances against the justice of law. Equity therefore does not destroy the law,
nor create it, but assists it66.
Left to grow its natural course, the statutory waiver under s 64 of the Contracts Act 1950, drawing its strength
from the elements of equity, has the ingenuity to cope with varying situations of discharge of contracts so as

Page 11

to bring about fair and just results without need to invoke promissory estoppel. This is particularly so in
Malaysia where waiver can be applied without consideration and without agreement.
Conclusion
The modern equitable doctrine of promissory estoppel has grown beyond its traditional boundaries,
permeated by the broader concept of unconscionability, which makes it more flexible, extending its reach to
situations where waiver may appear inapplicable. From the cases decided under promissory estoppe 67, it
may appear that s 64 of the Contracts Act 1950 is no longer sufficient to cater to cases of this nature,
especially when
6 MLJ lxviii at lxxxvi
pre-contractual expenses have been incurred by the parties on the faith of a contract which has not come
about. However, in the end analysis one finds that both waiver and estoppel derive their sap and blood from
the considerations of equity. It has been suggested that waiver, both in the sense of estoppel and in the
sense of election, may be regarded as no more than examples of a wider concept of unconscionability 68. It
may not be wrong to say that 'election', though a subject of much learning and refinement is in the end a
doctrine based on simple considerations of common sense and equity...' 69. Hence, taking a liberal attitude
towards 'waiver' and making it applicable in situations of discharge of promised obligations, whether in
contractual or non-contractual relationships, would be in keeping with equity and good conscience especially
in view of the broad and flexible words in which the doctrine of waiver is couched under s 64 of the Malaysian
Contracts Act 1950. It took some time for the doctrine of promissory estoppel to release itself from its
traditional knots and grow to its full strength. The doctrine of waiver is no less flexible to wriggle itself out of
the artificial circumference drawn around it by traditionalists. This should be much easier for Malaysia where
there is judicial precedent in construing principles of law broadly rather than narrowly, even if it entails
jumping the statute in the interest of reasonableness. In one such instance in the context of claimability of
damages Peh Swee Chin FCJ, referring to the express words of the statute, observed, '... by the primary rule
of construction ... they may seem to indicate clearly the dispensation of proof of actual damage or loss by an
innocent party to a breach of contract ... [but] it will produce a most unreasonable result in that it will change
the existing law ...'70.
6 MLJ lxviii at lxxxvii
Hence, treating 'waiver' under s 64 of the Malaysian Contracts Act 1950, as a flexible doctrine and giving it a
liberal interpretation would serve the purpose of fairness and justice besides ensuring certainty, which is the
hallmark of law.
6 MLJ lxviii at lxxxviii
1 Jorden v Money [1854] 5 HL Cas 185 is perhaps the first promissory estoppel case after which it has seen many ups and
downs and undergone remarkable changes in its refinement and improvement.
2 The obsession of the English legal system with the doctrine of consideration was so firm that it could not be dislodged by Lord
Mansfield's efforts to develop a theory of contracts without the requirement of consideration and Sir Fredrick Pollock's argument
that the requirement of consideration should be confined to its role in the formation of contracts without extending it to their
discharge.
3 Blackburn J in Bolton v Madden (1873) LR 9 QB 55.
4 Phang Swee Kim v Beh I Hock [1964] MLJ 383 (FC).
5 De La Bere v Pearson [1908] 1 KB 280 (CA).
6 In cases such as Anon (1495) YB 10 Hy vii for 4p 14; Pinnels case (1602) 5 Co Rep 117a: 77 ER 237.
7 British Russian Gazette & Trade Outlook Ltd v Associated News Papers Ltd (1933) 2 KB 320 per Scrutton LJ at p 327;
consideration for accord and satisfaction could be in any form: In the Malaysian case of Misliha binti Lagiman v Linguaphone
Distributors Sdn Bhd [2004] 2 AMR 48, in which the employee felt aggrieved by the employer mentioning her termination date
wrongly as September 1st instead of September 13th , a letter of correction and apology written on the plaintiff employee's
demand was considered as consideration for accord and satisfaction extinguishing the plaintiff's cause of action by estoppel.

Page 12

8 Per Jessel MR in Couldery v Bartrum (1881) 19 Ch D 394, p 399. This was the position in Pinnel's case, supra n 6.
9 This restrictive approach on 'accord and satisfaction' has been adopted in some Indian cases such as Union of India v Kihori
Lal Gupta AIR 1953 Cal 642, p 644, citing from Chitty on Contracts (20th Ed) p 286; PRL Saminathan Chetty v L Palaniappa
Chetty 18 Cal WN 617, pp 619-620 (PC); However, such approach of restricting the doctrine of 'accord and satisfaction' to
settlements after a breach of contract, does not accord with its natural meaning and may not be supported by cases elsewhere.
10 Supra n 6.
11 Byrn v Goodfrey (1798) 4 Ves 6.
12 This more than 400 years old rule owes its origin to Anon (1495) YB 10 Hy vii for 4p. 14 but came to fruition in Pinnel's case
in which the true legal position received clarity stated. The instances of 'accord and satisfaction' are found in Indian case of Lala
Kapurchand v Himayatali Khan AIR 1963 SC 250 where it was applied to the case of acceptance of Rs 20 lacs in full
satisfaction of the claim for Rs 27 lacs unless accepted under protest; Union of India v Nawlakha AIR 1997 Bom 209; Amar
Nath v BHE AIR 1972 All 176). In Mohamad Usman v Union of India AIR 1982 Raj 100, it was applied to a case where auction
was cancelled and the highest bidder was returned his money paid which he accepted. Thus he could not enforce the sale by
auction.
13 Supra n 6. Nonetheless, one of the promising advantages of this doctrine is that although a release, not in the form of a
deed, was ineffective to discharge a contract that was executory on one side, 'accord and satisfaction' operated as a discharge
if the other party agreed to accept some other or additional consideration in return for the right, which he abandoned, Cf, Chitty
on Contract supra n 10 at para 23.012).
14 Supra n 6.
15 (1884) 9 App Cas 605.
16 (1881) 19 Ch D 394, p 399.
17 Supra n 15.
18 This aspect has lost much of its importance in view of a lesser attention being paid to formal requirements in contracts in
modern times -- Anson's Law of Contracts (27th Ed) by J Beatson, Oxford University Press, New York p 496.
19 Cf, JW Carter, 'Waiver (of Contractual Rights) Distributed' 4 JCL VOL 59, 61 referring to The Mihalios Xilas [1979] 1 WLR
1018, 1034; Spencer Bower and Turner, The Law Relating to Estoppel by Representation (3rd Ed, 1977) pp 319-320; Tony
Dugdale & David Yates. 'Variation, Waiver and Estoppel -- A Re-Appraisal',(1976) 39 MLR 681.
20 Viscount Reading CJ in Panoutsos v Raymond Hadley Corporation of New York [1917] 2 KB 473; Lord Denning repeated
these words in Hoenig v Issacs [1952] 2 All ER 176,181 (CA).
21 Waman Shriniwas Kini v Ratilal Bhagwandas & Co 1959 Supp 2 SCR 217; Also see Jagad Bandhu Chatterjee v Nilima Rani
(1970) 2 SCR 925.
22 Charles Rickards v Oppenheim [1950] 1 KB 616, p 626; The Supreme Court of India on 5 April 2006 ruled in a rent case that
mere acceptance of the rent by the landlord after serving notices of eviction on the tenant does not amount to waiver because
his filing the suit for eviction after receiving the rent made his intention clear. Moreover, even if the rent was neither tendered nor
accepted the landlord in the event of his success would be entitled to the arrears of rent, see http://Samachar.com5 April 2006.
23 Charles Rickards v Oppenheim, supra n 22; Also see Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd [1955] 1
WLR 761 (HL); Woodhouse AC v Nigerian Produce Co [1972] AC 741 at p 757 (HL); WJ Allen & Co v El Nasr Co [1972] 2 QB
189 (CA).
24 Winn LJ in Panchaud Freses SA v Establishments General Grain Co [1970] 1 Lloyd's LR 53 at p 60.
25 Leather Cloth Co v Hieronimus (1875) LR10 QB 140; Toepfer v Warin Co AG [1978] 2 Lloyd's Rep 569, p 576; Ogle v
Comboyuro Investments Pty Ltd (1976) 136 CLR 444,451; Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 1 WLR
1048.
26 [1982] 2 MLJ 222, p 225.
27 [1966] 1 MLJ 38 (FC); However, it has to be realized that such a comparison between the Malaysian doctrine of 'waiver'
under s 64 of the Contracts Act 1950 and the common law doctrine of 'accord and satisfaction', my not be of much relevance for

Page 13

the present discussion, being a comparison between unequals.

28 [1969] 2 MLJ 181, p 183 (FC), following Chunna Mal Ram v Mool Chand (1928) 55 IA 154, in which it was observed on the
interpretation of the equivalent provision in the Indian Contract Act that a promisee may effectually dispense with the
performance of a contract, in whole or in part, without either an agreement by the promisor or consideration for the
dispensation.
29 [1990] 3 MLJ 287.
30 Ibid at pp 295-296; Waiver has been applied in Malaysia in cases of extension of the time of performance of contracts.
Where time was of essence of the contract but defendant, at the request of the plaintiff extended the time he could not
terminate the contract if the plaintiff failed to complete the contract within the extended time. The plaintiff would be granted
specific performance of the contract -- Wong Kup Sing v Jeram Rubber Estate Ltd [1969] MLJ 245 (HC); Sharikat Eastern
Plastic Industry v Sharikat Lan Seng Trading [1972] 1 MLJ 2 (HC). In deciding these cases the Malaysian courts have heavily
relied on the English authority of Webb v Hughes (1870) LR 10 Eq 281 in which Sir Malins VC viewed obiter (at p 286) that if
the time be made of essence of the contract that may be waived by the conduct of the parties. Once the time is allowed to pass
and the parties go on negotiating for completion of the contract, then time is no longer of essence of the contract. However, the
purchaser is not bound to wait an indefinite time, if he finds that long time shall elapse before the contract can be completed he
may in a reasonable manner give notice to the vendor and fix a period at which the business is to be terminated. The Court of
Appeal applied this dicta of Malins VC in Loke Yuen Cheng v Vimtex Sdn Bhd [1999] 4 MLJ 169.
31 [2005] 3 AMR 729.
32 [1982] 2 MLJ 222, p 225, relying on Besseler Waechter Clover & Co v South Derwent Coa; Co Ltd [1938] 1 KB 408.
33 see cases referred supra at n 25.
34 In cases like Jorden v Money (1877) 2 App Cas 439 (HL); Hughes v Metropolitan Railway Co [1951] 1 All ER 7.
35 In subsequent English cases like Durham Fancy Goods Ltd v Michael Jackson (Fancy Goods) Ltd [1968] 2 QB 839; WJ Alan
& Co Ltd v Al Nasr Export and Import Co supra n 21; Crabb v Arun District Council [1976] Ch D 179; The Malaysian cases like
Bank Negara Indonesia v Philip Hoalim [1973] MLJ 3; Boustead Trading (1985) Sdn Bhd v Arab-Malaysia Merchant Bank Bhd
[1995] 3 MLJ 331 (FC); The Indian cases like Motilal Padampat Sugar Mills Co Ltd v The State of Utter Pradesh AIR 1979 SC
621; The Australian cases like State Rail Authority (NSW) v Health Outdoor Pty Ltd [1986] NSWLR 170; Walton Stores
(Interstate) Ltd v Maher (1988) 164 CLR 387; Common wealth of Australia v Verwayen (1990) 170 CLR 394.
36 In this regard, Roskill LJ's caution may be referred to when he said in Brikom Investments Ltd v Carr [1979] 2 All ER 753, p
761 that there appears to be serious danger in any wider extension of the new etoppel, and those who place value on the
doctrine of consideration may think that some degree of caution is clearly indicated. Lord Roskill said that it would be wrong to
extend the doctrine of promissory estoppel, whatever its precise limits at the present day, to the extent of abolishing in any
backhanded way the doctrine of consideration. Nevertheless, some change of approach can be found in cases such as Soci'ete
Italo-Belge Pour Le Commerce et I'Industries SA v Palm and Vegetable Oils (Malaysia) Sdn Bhd (The Post Chaser) [1982] 1 All
ER 19 QBD (Commercial Court); Lord Denning has greatly contributed towards the liberalization of promissory estoppel in
cases like WJ Allen supra n 23.
37 1988) 164 CLR 387; The ground for the liberalization of the doctrine in Australia was prepared through cases like State Rail
Authority (NSW) v Health Outdoor Pty Ltd [1986] NSWLR 170 in which McHugh JA of the New South Wales Court of Appeal
expressed the view that courts should not be deterred from extending the doctrine of estoppel to pre-contractual negotiations. In
Common wealth of Australia v Verwayen (1990) 170 CLR 394 it was applied to prevent the state from pleading the statute of
limitation to an action for negligence, when it had promised not to rely on that statute.
38 The outstanding cases in this regard are: Motilal Padam Sugar Mills Co Ltd v State of UP AIR 1979 SC 621; Union of India v
Godfrey Phillips India Ltd (1985) 4 SCC 369; Delhi Cloth and General Mills Ltd v Union of India (1987) 3 SCJ 328; AP State
Electricity Board & Ors v M/S Sarade Ferro Alloys Ltd AIR 1993 SC 1521; Mangalam Timber Products Ltd v State of Orissa &
Ors AIR 1996 Ori 13I.
39 Delhi Cloth and General Mills Ltd v Union Of India (1987) 3 SCJ 328.
40 Supra n 35.
41 UMT Toyota (M) Sdn Bhd v Chow Weng Thiem [1996] 5 MLJ 678, per Abdul Malik Ishaq J of Johore Bahru High Court at p
685; In the Federal Court judgment of 1982 in Cheng Chuan Development Sdn Bhd v Ng Ah Hock [1982] 2 MLJ 222, p 225,
Salleh Abas FJ appears to stick to the requirement of detriment in order to successfully invoke the doctrine of promissory
estoppel when he held that there being no disadvantage the submission of estoppel must fail; Edger Joeph Jr J in Templeton v
Low Yat Holding Sdn Bhd [1989] 2 MLJ 202, p 244, applied promissory estoppel quite liberally to prevent the defendant from
relying upon the provisions of the Limitation Act 1953.

Page 14

42 UMT Toyota (M) Sdn Bhd v Chow Weng Thiem [1996] 5 MLJ 678, per Abdul Malik Ishaq J of Johore Bahru High Court at p
685; In the Federal Court judgment of 1982 in Cheng Chuan Development Sdn Bhd v Ng Ah Hock [1982] 2 MLJ 222, p 225,
Salleh Abas FJ appears to stick to the requirement of detriment in order to successfully invoke the doctrine of promissory
estoppel when he held that there being no disadvantage the submission of estoppel must fail; Edger Joeph Jr J in Templeton v
Low Yat Holding Sdn Bhd [1989] 2 MLJ 202, p 244, applied promissory estoppel quite liberally to prevent the defendant from
relying upon the provisions of the Limitation Act 1953.
43 WJ Allen & Co v El Nasr Export and Import Co supra n 23; M Sham Singh v State(1973) 2 SCC 303; Charles Richard Ltd v
Oppenhaim [1950] 1 All ER 420; In case of waiver by election the right inconsistent with the elected one is permanently lost -see JW Carter supra n 18 at p 66; It is the same in case of a representor who can be permanently estopped from claiming his
right which he has abandoned permanently; cf. Panoutsos v Raymond Hadley Corp of New York [1917] 2 KB 473);see also
supra p 7, n 23a.
44 MB f Finance Bhd v Low Ping Ming [2005] 1 AMR 610, p 620 (CA).
45 Chitty on Contracts Vol 1 General Principles (28th Ed) Sweet & Maxwell London p 1160 para 23.043.
46 Per Lord Denning LJ in WJ Allen supra n 23.
47 Treitel, Guenter, The Law of Contract 1999 London Sweet & Maxwell at p 109.
48 JW Carter supra n 18 at pp 60, 61; the learned author refers to Mardorf Peach & Co Ltd v Attica Sea Carriers Corp of Liberia
(The Lacconia) [1977] AC 850, p 871.
49 Cracknell (ed), Obligations: Contract Law, (3rd Ed, 2001) London, Old Bailey Press at p 61.
50 Keating on Building Contracts (7th Ed) (2001) P 328 para 11.05.
51 McKendrick, Ewan, Contract Law, 1990, London: Macmillan Education Ld, pp 69-70.
52 Crab v Arun District Council supra n 35, per Denning MR, Lawton and Scarman LJJ at p 189; Durham Fancy Goods Ltd v
Michael Jackson (Fancy Goods) Ltd supra n 35; Evenden v Guilford City Association Foot Ball Club Ltd [1975] QB 917 (CA)
followed in the Malaysian case of Cheng Hang Guan & Ors v Perumahan Farlim (Penang) Sdn Bhd & Ors [1993] 3 MLJ 352;
Walton Stores (Interstate) Pty Ltd v Maher & Anor supra n 35.
53 [1979] 2 All ER 753.
54 Ibid at pp 756, 758-759, 760.
55 They preferred the dictum of Lord Cairns LC in Hughes and De Lasselle v Guildford [1900-3] All ER 495.
56 [1975] 3 All ER 865.
57 Turner v Labafox International Pty Ltd (1974) 131 CLR 660; Commonwealth of Australia v Verwayen supra n 35.
58 See Dow Banking Corp v Mahnakh Spinning and Weaving Corp [1983] 2 Lloyd's Rep 561, p 566.
59 Lord Denning in Denning AT, Recent Developments in the Doctrine of Consideration 15 Mod LR 1 at p 2; WJ Allen supra n
23 per Lord Denning at p 213; See also the Indian cases referred to at n 38 & 39.
60 Sinadurai, Visu, 'Equitable Relief against Forfeiture' [1984] 11 JMCL 25, p 27.
61 Laughlan , Patricia, 'No right to the Remedy : An Analysis of Judicial Discretion in the Imposition of Equitble Remedies'
(1989-1990) 17 Melb ULR 132, p 134.
62 Nast, Lauren Elizabth: http://www.law.mcgill.ca.
63 Engineers and the Law: Recent Developments, a public lecture delivered on 31March 1989, sponsored by the Institute of
Engineers Malaysia at p 12,13, cf, Wan Izatul Asma Wan Talaat, The Continuing Evolution of Promissory Estoppelm, 1995
unpublished PhD thesis p 114.
64 Engineers and the Law: Recent Developments, a public lecture delivered on 31March 1989, sponsored by the Institute of

Page 15

Engineers Malaysia at p 12,13, cf, Wan Izatul Asma Wan Talaat, The Continuing Evolution of Promissory Estoppelm, 1995
unpublished PhD thesis p 114.
65 Sinadurai Visu, "Equitable Relief against Forfeiture" [1984] 11 JMCL 25 at p 26.
66 [1705] Prec Ch 241 at p 244.
67 Such as Durham Fancy Goods Ltd v Michael Jackson (Fancy Goods) Ltd supra n 35; Amalgamated Investment & Property
Co Ltd v Texas Commerece International Bank Ltd [1981] 1 All ER 923; A-G of Hong Kong & Anor v Humphreys Estate
(Queen's Garden) Ltd [1987] AC 114; Evenden v Guildford City Association Football Club Ltd supra n 46; Crabb v Arun Ditrict
Council supra n 35; Walton Stores (Interstate) Pty Ltd v Maher & Anor supra n 31; Chanrich Properties Pty Ltd v Baulkham
Hillshire Council [2001] NSWSC 229; Evans v Amicus Healthcare Ltd [2003] EWHC 2162; Cheng Heng Guan v Perumahan
Farlim supra n 52; Boustead Trading (1985) Sdn Bhd v Arab-Malaysia Merchant Bank Ltd supra n 35; Teh Poh Wah v
Seremban Securities [1996] 1 MLJ 701.
68 Such indications are found in cases like CSS Investments Pty Ltd v Lopiron [1987] 76 ALR 463, pp 472, 482.
69 As per Lord Wilberforce in Johnson v Agnew [1980] AC 367 at p 398; For a fuller discussion see Carter supra n 18 at pp 7172. The identification of unconscionability as the basis running through these doctrines can be discerned also in the words of
Winn LJ in Panchaud Freres.
70 Silva Kumara/l Murugiah v Thiagarajah a/l Retnasamy [1995] 2 SCR 29, p 37 (FC): Under s 75, for a successful claim of
liquidated damages, proof of damage or actual loss has expressly been dispensed with. However, the Federal Court, following
the English Privy Council in Linggi Plantations Ltd v Jagathesan [1972] 1 MLJ 89 and Bhai Panna Singh v Bhai Arjun Singh AIR
1929 PC 179, disallowed damages without proof of damage or actual loss. This case has been followed in subsequent cases,
eg Reliance Shipping & Travel Agencies v Low Ban Siong [1996] 2 MLJ 543 (CA); The Malaysian Court of Appeal has held the
same way in the recent case of Johor Coastal Development Sdn Bhd v Constrajaya Sdn Bhd [2005] 2 AMR 90, p 97 (CA).