Why Was a Promise to Make an Ex Gratia Payment

question 2

Multiple Choice

Why was a promise to make an ex gratia payment held to be contractually binding in the case of Edwards v Skyways Ltd [1964] 1 WLR 349?

• A) The parties used clear words.
• B) The agreement was commercial and promissory in nature.
• C) The parties were both corporate entities.
• D) The promise had serious consequences.

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Definitions:

Maturity

The final payment date of a loan or other financial instrument, at which point the principal (and all remaining interest) is due to be paid.

Annual Coupon

The interest payment made to bondholders once a year, based on the bond's face value.

Yield To Maturity

The complete return expected from holding a bond until it reaches its maturity.

Market Price

The price for an asset or service in the market at the present time.