Promissory Estoppel

Question 1

Promissory Estoppel

Answer 1

When the OE detrimentally relies on the OR’s promise, the doctrine of promissory estoppel may make the offer irrevocable.

It must have been reasonably foreseeable that such detrimental reliance would occur.

Question 2

Common Elements

Answer 2

1. Promise (must have a promise by promisor)
2. Foreseeable reliance (on promise by promisee)
3. Actual reliance
   (i) Promisee must actually rely on the promise to their detriment (action or forbearance) and actual reliance must be reasonable and generally substantial
   (ii) Reliance must be reasonable
   (iii) Promisee is induced by promise
   (iv) Promisee suffers detriment (usually m/b substantial)
4. Injustice can be avoided only by enforcement of the promise

Question 3

First Restatement: A promise (even if it lacks consideration) is binding if:

Answer 3

1. The promisor should reasonably expect the promise to induce action or forbearance rom the promise
   a. Was it foreseeable that this promise could/should induce action/forbearance?
2. The promise does induce such action or forbearance; AND
   a. Whether the promisee did actually take action/forbearance in reliance on the promise?
3. Injustice can be avoided only by enforcement of the promise
   a. What were the losses/damages incurred in reliance on the promise?
   b. No damages -> If you rely on a promise, but it’s not to your detriment

Question 4

Doctrine of Promissory Estoppel

Answer 4

A promisor makes an offer knowing that he other party will likely rely on the offer + The other party suffers unavoidable harm because of that reliance = The offer becomes binding

Question 5

Definition: First Restatement (Traditional)

Answer 5

A promise which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee and which does induce such action or forbearance is binding if injustice can be avoided by the enforcement of the promise

Question 6

Definition: Second Restatement (Modern)

Answer 6

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