GUARANTEES, ESTOPPEL AND THE STATUTE OF FRAUDS

Actionstrength Ltd v International Glass Engineering In. Gl. EN. SpA [2003] UKHL 17; [2003] 2 WLR 1060

The House of Lords in Actionstrength Ltd v International Glass Engineering In. Gl. EN. SpA [2003] UKHL 17; [2003] 2 WLR 1060 has dismissed an appeal from the decision of the Court of Appeal ( [2002] BLR 44, on which see our May 2002 issue, pp.1–4) and held that the claimants were not estopped from invoking s4 of the Statute of Frauds in order to deny liability on an oral guarantee which it was alleged that the claimants had provided. On the facts the only assurance given by the claimants to the defendants was the oral promise itself (which was unenforceable) and this was held to be insufficient to give rise to an estoppel. Their Lordships did not conclude that estoppel can never be invoked in order to prevent reliance upon the Statute of Frauds. But they did conclude that ‘something more’ was required than reliance upon the unenforceable promise itself. The precise nature of that ‘something more’ was not established by their Lordships but it is likely to take the form of an express assurance that reliance will not be placed upon the Statute of Frauds or something similar.