Question 2

McMaster, a wealthy doctor undertook to contribute $2,500,000.00 to Brock University's capital

campaign, payable in 5 annual instalments of $500,000.00. On the occasion when McMaster made the pledge the President of the University stated that the University would now be able to undertake the construction of an additional building and continue with its application to establish an accredited medical school. A picture of McMaster and the University President was published inthe local paper and on the University's website together with a news item about McMaster's generous contribution to the campaign.

One month later McMaster asked if the University would name the new medical school building after him. The President agreed and said the University would be honoured to call the new building "McMaster Hall" in recognition of his pledge.

One year later, following payment of the first instalment of the pledge and as construction was about to begin, the President contacted McMaster and advised him that in accordance with the University's naming policy, the University had recently entered into an agreement with Siri, to name the new building, once completed, "Siri Hall". Siri had agreed to pay $4,000,000.00 for the naming rights for a period of 20 years from the completion of the building.

The President advised McMaster that a lecture hall in the building would now be named McMaster Hall.

McMaster advised the University that it had breached their agreement and he would not be making any further payment.McMaster demanded the immediate return of the $500,000.00 he had paid.

The University responded that it had hired architects and engineers, had closed off a parking lot, entered into a construction contract and commenced construction based on McMaster's promiseand would be commencing legal action against McMaster for the balance of $2,000,000.00.

Required: Discuss the application of the principles of consideration andinjurious reliance/equitable estoppel to the facts of this case. Will the University or McMaster succeed in the legal action?Is there additional information which might affect the result?