estoppel the waiver may be withdrawn before change of po sition in reliance upon it.96 As will be seen,97 in some cases, and in some jurisdictions, promises to forego a defence have been held binding, even though made after the defence had arisen and though there was no consideration or element of estoppel to support the promise. A jurisdiction which takes this view might logically hold that reliance on a promise to forego an excuse need never be supported by estoppel, and so holding might hold revocation impossible after a promise has once been made to forego the excuse.98 Such a view, however, seems inconsistent with the fundamental principles of the common law regarding the formation of contracts. § 690. Waiver of promise before maturity. The distinction is not always observed between excusing another from performance of a condition or from the effect of a defence, and excusing him from liability on an obligation. The confusion is due in great measure to the circumstance that in bilateral contracts the performance of an act operates frequently as performance both of a condition and of an obligation. In a contract for example where an employee promises to serve faithfully and the employer promises to pay him a specified salary if he works faithfully, faithful service is both a performance of the employee's obligation and also a perform Panoutsos v. Raymond Hadley Corp., [1917], 1 K. B. 767, 2 K. B. 473; Hasler v. West India S. S. Co., 212 Fed. 862, 129 C. C. A. 382; Grippo v. Davis, 92 Conn. 693, 104 Atl. 165; Dunning v. Mauzy, 49 Ill. 368, 370; Fox v. Grange, 261 Ill. 116, 103 N. E. 576. In Webb v. Hughes, L. R. 10 Eq. 281, 286, the court said: "If time be made the essence of the contract, that may be waived by the conduct of the purchaser; and if the time is once allowed to pass, and the parties go on negotiating for completion of the purchase, then time is no longer of the essence of the contract. But, on the other hand, it must be borne in mind that a purchaser is not bound to wait an indefinite time; and if he finds, while the negotiations are going on, that a long time will 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. But, having once gone on negotiation beyond the time fixed, he is bound not to give immediate notice of abandonment, but must give a reasonable notice of his intention to give up his contract if a title is not shewn." See also Massey v. Becker, 90 Oreg. 461, 176 Pac. 425, and infra, § 741 ad fin. 97 See infra, § 693. 98 See Beauchamp v. Retail Merchants' &c. F. Ins. Co., 38 N. Dak. 483, 165 N. W. 545. 1 ance of the condition qualifying the employer's obligation. It is entirely possible that the performance of an act be excused as a condition, and yet not excused as an obligation. A voluntary statement by a creditor even before a debt has become due that the debt need not be paid, would generally not be held to excuse the debtor from liability.99 The principle can be no different when instead of a money debt there is an obligation to deliver land or goods or to render services. But if the payment of the debt were a condition qualifying a promise by the creditor, the latter's statement that he would perform his promise irrespective of payment of the debt, would waive the payment as a condition though not as an obligation if the debtor in reliance on the statement failed to pay. It may, however, sometimes operate as a fraud to enforce liability on a promise after the promisee has stated that performance need not be made. And though an excuse of the promisee from liability seems inconsistent with the general doctrine that a promissory estoppel is not a substitute for consideration either in creating or discharging obligations, there are many cases where liability is held discharged in the case supposed. This may be called waiver of liability as distinct from waiver of a condition or excuse. Though a debt of five dollars cannot be discharged by mere assent, yet if the debt is due on a particular day, the obligation to pay it on that day may be discharged without consideration, if relying on the creditor's permission to defer payment the debtor allows the day to go by. And permission to defer payment given prior to the day of maturity will operate as a continuing license.3 99 Hayford v. Andrews, Cro. Eliz. 697. See also Terrell v. Proctor (Tex. Civ. App.), 172 S. W. 996; and infra, §§ 1829 et seq. 1 C. F. Adams Co. v. Helman, 58 Ind. App. 394, 400, 106 N. E. 733. 2 See supra, § 139, and infra, §§ 1831, 1841 et seq. Even this was not formerly true in the case of sealed instruments. In Hayford v. Andrews, Cro. Eliz. 697, to an action of debt upon an obligation, the defendant pleaded that before the 2 day, the plaintiff, in respect of a trespass made by his beasts in the defendant's land, gave unto him a longer day of payment, which has not yet come. The plaintiff demurred, and though the defendant argued that since it "was before the day, the plaintiff might well by word defer it, . . . the court without argument held it to be no plea for an agreement, that parol can not dispense with an obligation." Cf. the preceding section. There is the same principle of fairness involved in excusing damages for failure to make prompt payment in such a case as exists where performance is actually prevented. Permission is not strictly prevention, but it is likely to produce the same consequence of non-performance. Though the creditor after such waiver has been acted upon by letting the day go by cannot demand damages for failure to pay on the day, he can demand performance on a subsequent day and recover damages if payment is not then made. Waiver, therefore, in such a case excuses temporary breach of the obligation, but does not permanently excuse performance. But let it be supposed that the obligation was to serve on December 20th, and the obligee says, in effect: "you need not serve on that day." This similarly will excuse the servant from liability for failure to perform on that day, but will have further consequences. The employer cannot say on December 25th "I demand the day's service which you owe me." Service on December 25th or even on December 21st is regarded as a different thing from service on December 20th, though payment of five dollars for the conveyance of Blackacre is regarded as substantially the same thing whenever the performance is rendered. From these illustrations the correct principle may be deduced; namely,waiver of performance of an obligation which means permission not to perform it, excuses the obligor from performing so long as the waiver or permission continues and if the waiver continues so long that performance by the obligor will be essentially different from that which he originally bargained to render, all right to enforce the obligation is lost. Prior to that time the creditor may withdraw his permission even though he originally stated that he waived permanently all right. He cannot act in such a way as to make his permission work an injury to the obligor, but this is the only limitation on his right of revocation.5 4 See modern applications to contracts generally of the principle stated in the text. Williams v. Wheeler, 8 C. B. (N. S.) 299; Plevins v. Downing, 1 C. P. D. 220; Thomson v. Poor, 147 N. Y. 402, 42 N. E. 13; and supra, § 595. Bast v. Byrne, 51 Wis. 531, 8 N. W. 494, 37 Am. Rep. 841; see also Rickard v. Couts, 5 Hawaii, 507. 5 Thus a landlord who has given his tenant permission to surrender his lease may withdraw the permission at any time prior to actual surrender. Dunning v. Mauzy, 49 Ill. 368, 370. Cases may be found where promises to give up a right to damages for an accrued breach of an obligation have been enforced without either consideration or promissory estoppel, just as promises to forego excuses have been similarly enforced." But such decisions are necessarily at variance with the ordinary requirements for the discharge of obligations. § 691. A promissory estoppel does not require an intent to surrender a right, As has been seen, neither a contract for substituted performance nor an election of one right rather than another requires for its validity any actual intent to surrender the right which is lost. Waiver, as that word is used in the cases, is not generally based on contract for consideration but on promissory estoppel. And the suggestion that where such is the basis there must be an intent to surrender a right is at least equally misleading. It is not the intention of the party estopped but the natural effect upon the other party which gives vitality to an estoppel." It On the other hand, in Orvis v. BritishAmerican Cotton Co., 242 Fed. 835, 155 C. C. A. 423, the plaintiff sued for a balance of account under a contract in substance as follows: The plaintiff having deposited a margin of eight dollars a bale, the defendants paid drafts for the purchase in the United States of cotton secured by bills of lading; the plaintiff was to resell the cotton in England and it was sent forward with drafts on an English bank secured by ocean bills of lading. With the price thus obtained the defendants were to be reimbursed, and any balance remaining was payable to the plaintiff. The original agreement contemplated that the defendants should hold the margin of eight dollars a bale until the cotton had been dis posed of. Subsequently, however, without consideration, the defendants agreed that the amount of the margin should be credited to the plaintiff in England where its agent was going to negotiate the sale of the cotton. Still later, however, after the agent had See the preceding section. may be said here, as in the case of assent to a substituted contract, that it is the justifiable belief of the party relying on the so-called waiver which is the essential thing. § 692. Knowledge of facts is not necessary for a promissory estoppel. The fundamental basis of waiver, so far as there may be said to be a distinct legal principle going by that name, is promissory estoppel. The doctrine of estoppel in pais, though included by Lord Coke in his description of estoppels received for the first time wide application in recent years, and it has been extended far beyond the limits formerly set for it. In a case decided in the first half of the nineteenth century, which is usually regarded as the leading authority on the subject, it was stated as a necessary element that the misrepresentation forming the basis of the estoppel should be "wilfully" made. It was not long, however, before the use of this word was explained in such a way as to deprive it of its natural meaning." Long before this time, moreover, equity cases had illustrated the doctrine and applied it, in a special class of cases though not under the name of estoppel. 10 At the present time, though in many jurisdictions there are expressions still used which seem to mean that either fraud or culpable negligence is an essential element for estoppel," it is certain that the great weight of recent authority supports the view that positive statements of fact as to matters upon which the speaker may fairly be supposed to be informed may give rise to an estoppel, Ia. 721, 727, 57 N. W. 623; May, Pickard v. Sears, 6 Ad. & El. 469. 'In Freeman v. Cooke, 2 Exch. 654, 663, Parke, B., said: "By the term 'wilfully,' however, in that rule, we must understand, if not that the party represents that to be true which he knows to be untrue, at least, that he means his representation to be acted upon, and that it is acted upon accordingly; and if, whatever a man's real intention may be, he so conducts himself that a reasonable man would take the representation to be true, and be lieve that it was meant that he should act upon it, and did act upon it as true, the party making the representation would be equally precluded from contesting its truth." In Bloomenthal v. Ford, [1897] A. C. 156, 160, it is said: "Whether a wilful misrepresentation or not it is immaterial to inquire." 10 See opinion of Kay, L. J., Low v. Bouverie, [1891] 3 Ch. 82, 107. 11 See for a recent illustration Conway Nat. Bank v. Pease, 76 N. H. 319, 82 Atl. 1068. |