Promissory Estoppel
Rule
A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee, 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. (Restatement 2d § 90)
Elements
- A promise by the promisor
- The promisor should reasonably expect the promise to induce action or forbearance
- The promisee actually relies on the promise — action or forbearance
- The reliance is reasonable and results in a detriment
- Injustice can be avoided only by enforcement
Exceptions
- Charitable subscriptions: Binding without proof of actual reliance-induced action (Rest. 2d § 90(2))
- Remedy limitation: Courts may award only reliance damages rather than full expectancy, as justice requires
- Precontractual reliance: Distinguished from mere “puffing” during negotiation — the more specific the promises, the more reasonable the grounds for reliance (Hoffman v. Red Owl Stores)
Policy
Promissory estoppel fills gaps left by consideration doctrine, protecting parties who have reasonably relied on promises to their detriment even without a formal bargained-for exchange. It prevents unjust loss where enforcement is the only way to avoid injustice, without necessarily granting full contract expectancy.
Key Cases
- Kirksey v. Kirksey — early case recognizing detriment-based reliance recovery even without formal consideration
- Wheeler v. White — party who acts on a promise cannot be left without remedy even if underlying contract is unenforceable for indefiniteness; reliance damages awarded
- Hoffman v. Red Owl Stores — precontractual reliance on franchise negotiations; reliance damages for lost opportunities even without final agreement
- Drennan v. Star Paving Co. — subcontractor’s bid creates implied option contract when general contractor foreseeably relies on it in submitting overall bid