Principle of Promissory Estoppel
Promissory estoppel is an equitable doctrine allowing a court of equity to enforce a promise which would otherwise be unenforceable under law. Those with specific questions about contract law should seek advice from a contracts lawyer.
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Consideration Requirement
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To be legally enforceable, a contract must be supported by consideration, meaning that at least one party agreed to give up something legally valuable in return for the other party's promise.
Gratuitous Promises
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A promise to another party that is not supported by legal consideration is known as a gratuitous promise and courts of law do not enforce gratuitous promises.
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Reasonable Reliance
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Promissory estoppel evolved in courts of equity in order to address the injustice when one party reasonably relied on the other party's gratuitous promise and was injured by that reliance.
Promissory Estoppel Elements
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Application of promissory estoppel generally requires three elements: that one party made a promise and could reasonably expect the other to rely on that promise, that the other party did in fact rely on the promise to his detriment and that enforcement of the promise is the only way to avoid injustice to the relying party.
Example
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Bob tells Ann that he will give her his house next March in return for nothing (a gratuitous promise). In reasonable reliance on Bob's promise, Ann spends money to improve Bob's house. When March comes, Bob decides to keep his house. Ann could claim promissory estoppel against Bob to force him to give her the house or to recover her money expended to improve the property.
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References
- "Cases and Materials on Contracts, Sixth Edition"; Farnsworth, E. Allan and William F. Young, Jr. and Carol Sanger and Neil B. Cohen and Richard Brooks; Foundation Press; 2002
- "Black's Law Dictionary (Seventh Edition)"; Garner, Bryan (Editor);1999 - Promissory Estoppel
- The Free Dictionary: Promissory Estoppel
Resources
- Photo Credit contract 20309 image by pablo from Fotolia.com
