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

Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co [1972] AC 741 centres around the application of promissory estoppel in a contractual dispute between Woodhouse AC Israel Cocoa Ltd SA (Woodhouse), the seller, and Nigerian Produce Marketing Co (NPM), the buyer, regarding the method of payment for a cocoa sale contract.

The parties initially entered into a contract for the sale of cocoa. Subsequently, Woodhouse inquired whether NPM would accept payment in Sterling instead of the local currency (Nigerian Pound), and NPM agreed to this arrangement. However, the value of Sterling later devalued, resulting in Woodhouse arguing that they were entitled to pay at the initial rate, while NPM contended that Woodhouse was liable to pay in Sterling at the prevailing exchange rate.

The court ruled in favour of NPM, and Woodhouse's claim failed. The central issue was the ambiguity surrounding the promise to accept payment in Sterling. Lord Hailsham emphasised that a clear and unequivocal promise is essential for promissory estoppel to be valid. In this case, the ambiguity in the statement regarding the acceptance of Sterling undermined the basis for promissory estoppel.

Lord Hailsham argued that if the letters were too ambiguous to be considered a variation of the contract, they were also too ambiguous to form the basis of a promissory estoppel. The principle is that an ambiguous statement cannot serve as the foundation for an estoppel, as this could result in the offeree gaining an advantage not attainable under conventional contract law due to a genuine misunderstanding.

Viscount Dilhorne, concurring with Lord Hailsham, stressed that for an estoppel to be established, the representation must be clear and unequivocal. In this instance, the ambiguity in the promise prevented the formation of a valid estoppel.

In conclusion, Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co underscores the crucial requirement of a clear and unequivocal promise for the application of promissory estoppel. Ambiguous statements, as seen in this case, cannot form the basis of an estoppel and must be clear in their meaning to be legally effective.
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