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Promissory Estoppel, n
What Is Promissory Estoppel?
Promissory estoppel is a legal doctrine that states that if someone reasonably relies on a promise and acts (or fails to act) in a way that causes them financial harm because of that promise, the promise can be enforced.
This is an alternative claim to a breach of contract claim. You might bring a promissory estoppel claim when you have an oral contract that usually should have been in writing (because of what is called the statute of frauds) or when your agreement didn't include consideration.
Promissory Estoppel Elements
Each state has different elements you must meet to make a promissory estoppel claim, but the law typically requires that:
- Someone (the defendant) made a promise to you
- You reasonably relied on the promise, causing you to act or not act as a result
- You were harmed as a result of your reliance on the promise
- The defendant should have expected that you would rely on the promise
- The only way to avoid injustice is by enforcing the promise
Promissory Estoppel Cases and Law
U.S. states differ on when promissory estoppel applies, so it's a good idea to look up your state's laws. Here are examples of cases and laws in the U.S. that discuss or help define promissory estoppel:
- 29 U.S.C.A. section 1132(a)(1)(B),(3): Right to bring an action for equitable relief
- Cohen v. Cowles Media Co. (1991): The First Amendment does not prohibit promissory estoppel claims involving a newspaper publishers' breach of a confidentiality promise.
- Kajima/Ray Wilson v. Los Angeles County Metropolitan Transportation Authority (CA, 2000): A top bidder on a public works project who was denied the project could recover bid preparation costs under promissory estoppel, but not profits.
- Grover v. Wadsworth (Idaho, 2009): Example of a state's elements of promissory estoppel
Promissory Estoppel Example
Joe, a subcontractor working on a construction project, tells Robert, the owner of the property, that the general contractor is behind in payments. Robert promises that Joe will be paid in full and tells Joe to complete the work. Joe completes his work, but never receives full payment. Joe brings a promissory estoppel claim against Robert for the remainder of the payment. (He cannot bring a contract claim because his state's statute of frauds requires that service contracts over $500 need to be made in writing.)