Promissory Estoppel

Promissory Estoppel defined

1. R2d §90 Promise Reasonably Inducing Action Or Forbearance

(1) A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.

(2) A charitable subscription or a marriage settlement is binding under Subsection (1) without proof that the promise induced action or forbearance.

2. Four elements P has to prove

   1. Promise: objective, manifested intent

      1. Cannot be too vague

      2. R2d §2(1) A promise is a manifestation of intention to act or refrain from acting in a specified way, so made as to justify a promisee in understanding that a commitment has been made.

   2. Fork: promisor reasonably expects to induce reliance: reasonable foreseeable reliance.

      1. Objective standard

      2. Custom practice upon learning the promise can be an argument

   3. actual reliance induced by the promise

      1. causation: B must show that without A’s promise, B would not have done sth (Hayes)

      2. justifiable reaction to the promise: whether a reasonable person in the promisee’s position would have so acted or refrained from acting as a result of the promise.

         1. reputation of the promisor for not honoring his promise, then reliance propably not justified

   4. injustice can be avoided only by enforcement

      1. detriment or harm suffered by the promise

      2. weigh the lack or presence of formality and the apparent deliberateness of the commitment

3. E.g. Feinberg: A has been employed by B for 40 years. B promises to pay A a pension of $200 per month when A retires. A retires and forbears to work elsewhere for several years while B pays the pension. B's promise is binding.

Amount of damage

1. Amount of recovery: Where P.E. is used, the damages awarded are generally limited to those necessary to "prevent injustice." Usually, this will mean that the plaintiff receives reliance damages, rather than the greater expectation measure.

2. However, Court has the discretion to award expectation damage.

Applications

1. Promise to make a gift: The P.E. doctrine is most often applied to enforce promises to make gifts, where the promisee relies on the gift to his detriment.

   1. Intra-family promises: The doctrine may be applied where the promise...

Buy the full version of these notes or essay plans and more in our Contracts (Duke Gulati) Outlines.