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Promissory Estoppel

Promissory estoppel is an equitable doctrine that enforces a promise lacking consideration when the promisor should reasonably expect the promise to induce reliance, the promisee actually and reasonably relies, and enforcement is necessary to avoid injustice.

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Exam Tip

Promissory estoppel = consideration substitute. Promise + Reasonable reliance + Injustice. Drennan = subcontractor bids.

What is Promissory Estoppel?

Promissory estoppel serves as a substitute for consideration, allowing enforcement of promises when detrimental reliance makes enforcement necessary.

Elements (Restatement Second Section 90)

ElementDescription
PromiseClear and definite promise
Reasonable ExpectationPromisor should expect reliance
Actual ReliancePromisee actually relied
Reasonable RelianceReliance was reasonable
InjusticeEnforcement necessary to avoid injustice

Landmark Cases

  • Ricketts v. Scothorn (1898): Grandfather's promise enforced
  • Hoffman v. Red Owl (1965): Franchise reliance
  • Drennan v. Star Paving (1958): Subcontractor's bid irrevocable

Damages

Typically limited to reliance damages (out-of-pocket costs), not full expectation damages.

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Related Terms

Consideration (Contracts)

Consideration is the bargained-for exchange of legal value between parties that supports enforceability of a contract, requiring both a bargain (exchange) and legal detriment or benefit.

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