Promisorry Estoppel

Question 1

Expectation Damages

Answer 1

Primary Form of Contract Damages
- Placing the promisee in the position he would have been in had the contract been honored.
Goal = Give the promisee the benefit of the bargain by awarding money equivalent of what the promisee would have gained as a result of the contract.

Question 2

Reliance Damages

Answer 2

(primary focus of promissory estoppel)

• Reimburse for the loss caused by reliance.
• look toward the past to restore the promisee to the position they were in before the promise was made.
• Remi

Question 3

Situations where Promissory Estoppel may be applicable to COMMERCIAL TRANSACTIONS

Answer 3

1) Enforceable if Fairness Demands it.
2) When Precontractual statements may Reasonably be intended as a binding commitment, justifying reliance and liability
3) Promise that falls short of becoming contractual (omission or defect), but justifies reliance.

Question 4

Elements of Promissory Estoppel

Answer 4

1) Promise made by the promisor +
2) REASONABLE EXPECTATION that promisee will rely on that promise. (Intent to INDUCE RELIANCE)
3) ACTUAL RELIANCE (Action / Forbearance) - which must be justified or Reasonable.
4) Enforcement is NECESSARY TO AVOID INJUSTICE
5) Remedy may be limited as justice requires

Question 5

Promise (Promissory Estoppel)

Answer 5

Objective Manifestation of Intent to commit to a particular PERFORMANCE or COURSE OF ACTION.

• Judged by the words and conduct of the promisor under the relevant circumstances,
• Must be specific to be enforceable
• Voluntary and deliberately made

Question 6

Reasonable Expectation

Answer 6

• Reasonable Expectation that the promise would induce the ACTION or FORBEARANCE by the Promisee
• Knew or reasonably should have realized the Promisee would be likely to understand that the promise had been made and would INDUCE ACTION OR FORBEARANCE.

Question 7

ACTUAL RELIANCE

Answer 7

• Promise actually induced action or forbearance by Promisee.
• Analysis:
  Causation - did the promise CAUSE the Promisee’s ACTION?
  Reasonableness: Whether a reasonable person in the offeree’s position would have acted or refrained from acting as a result of the promise. (Also, called JUSTIFICATION).

Question 8

Avoiding Injustice by Enforcement

Answer 8

• Detriment, or actual economic harm resulting from Actual Reliance.
• Not a general expectation of gain. (must be a detrimental loss)
• Need to Avert Injustice by enforcing the Promise.

Question 9

Remedy (promissory estoppel)

Answer 9

Expectation damages (Specific Performance), or 
Reliance Damages Only. (Discretionary).

Question 10

PreContractual Agreements (Negotiations)

Answer 10

-Typically not enforceable by promissory estoppel b/c
no REASONABLE RELIANCE (no contract yet)
e.g. Business seller tells potential buyer to find an investor to finance the purchase. Buyer spends money to find investor, Seller sells to someone else. - No Cause of Action. No Reasonable Reliance.

Question 11

Relief for Lost Profits

Answer 11

= Expectation Damages for contractual agreements

- Normally do not apply to cases of promissory estoppel.

Question 12

Promissory Estoppel Analysis: Step One?

Answer 12

Determine whether a valid contract has been formed.
If not, Promissory Estoppel is a basis for relief.
(No Consideration = Required)