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Contracts II
Stetson University School of Law
Fitzgerald, Peter L.

Promissory Estoppel & Non-Commercial Promises
Promissory Estoppel – A theory that protects a promisee who has relied to his detriment on the promise, even if consideration or other elements of enforceability may not otherwise be present.
*Core Application — non-reciprocal promises
*Future Oriented
*Based on Equitable Estoppel –A theory that keeps a promissor from profiting from deliberately misstating (or concealing) material facts to get the promisee to take certain actions. 
*Rennagading is not misstating but change of mind.
*Controversial because of bargain theory of Contracts which states promisor cannot be liable for detriment not bargained for
*Under promissory Estoppel defendant is estopped from arguing there was no consideration because plaintiff relied to his detriment. Basically, defendant is liable even when the plaintiff hasn’t given a peppercorn or a return promise to seal the deal.
*Many early cases were decided in personal contexts.
*Promissory Estoppel works sometimes in negotiation contexts in which this is an incomplete Contract (Or simply a promise to contracts that person relied on to detriment)
–> POLICY! : Loss and inconvenience of Plaintiff, even if not bargained for by defendant ought to support some sort of recovery.
 
Promissory Estoppel – A theory that protects a promisee who has relied to his detriment on the promise, even if consideration or other elements of enforceability may not otherwise be present.
*Must satisfy the statute of frauds
 
Three Conditions Must Be Met To Establish Promissory Estoppel — (Rhode Island – Norton v. McOsker)
1. A clear and unambiguous promise
2. Reasonable and justifiable reliance upon the promise
3. Detriment to the promisee, caused by his or her reliance on the promise
 
Restatement 2d §90
§90. PROMISE REASONABLY INDUCING ACTION OR FORBEARANCE
(1) 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.
 
·     Getting something for Promissory Estoppel is dependant on the reliance on the promise an which should have a definite and substantial character in relation to the remedy sought
§           Seek a reasonable remedy
·                 Unless there is unjust enrichment of the promisor, damages should not put the promisee in a better position than performance of the promise would have put him.
·     Kirksey v. Kirksey — Brother in law promised to take care of sister-in-law after brother’s death in letters. Sister sold house and moved in with brother in law for 2 years… thereafter he moved her to a cabin in the woods which was not acceptable living conditions. Ct held that loss and inconvience of sister to break up and move sixty miles with family was not adequate consideration (under promissory estoppel) to gratitous promise to take care of her until children grew up. 
·     Rickets v. Scotthorn — grandfather gave 2,000 promissory note to granddaughter to not work anymore, which she quit job was supported. Then started to work again, with grandfather’s permission. Grandfather never repudiated on promissory note. Upon death, executor refused to pay the balance owing on the note. Supreme ct. Held that note was gratuity and not supported by consideration. However, having intentionally influence the plaintiff for the worse on the faith of the note being paid when due, it would be grossly inequitable to permit the executor to resist payment on the ground that the promise was given w/o consideration — thus affirmed a judgement against the grandfather’s estate.
·     Norton v. McOsker — Mistress sues man for support under Promissory Estoppel b/c on reliance on his promises to leave wife and marry her she gave up opportunities to marry and have children with another man at an earlier age, became pregnant, experienced depression and anxiety, resigned her teaching position. He allegedly led her to rely on these promises by allowing her to become accustomed to an extravagant lifestyle and let him ensure her financial security through the relationship and 2 years afterward.   Ct held that to enforce a promise to divorce a current spouse would be against public policy and the doctrine of estoppel has no application to a K which is void because it violates the dictates of public policy. A promise to “take care of” Norton was too vague to be a “clear and unambiguous promise” — thus not legally enforceable. Also, Norton’s reliance on promise was unreasonable b/c defendant had continually lied and break his promises to plaintiff — thus proving reliance on his promises to be unreasonable. The ct. was also skeptical that her detriment was caused by defendants promises of support– but b/c Norton not meeting first 2 req. of promissory estoppel they did not delve into the issue. 
 
Reliance must be reasonable
*Reasonableness of reliance is usually a question for the jury
*The promisor is liable only for reliance which he does or should foresee
*enforcement must be necessary to avoid injustice.
*Reliance by third persons. If a promise is made to one party for the benefi

t liability under the claim of “Enticing a Party to Breach a Contract or a Preliminary Agreement” (the existence of a valid K is a prerequisite for this tort action)
 
Promissory Estoppel & Commercial Promises
 
*Courts tend to place a claim of promissory estoppel to greater scrutiny in the commercial context.
§         Also dependant on the formality of the promise
§         Dependant also on the extent to which the evidentiary, cautionary,
deterrent and channeling functions of form are met by the commercial setting or otherwise
*Given the prevalence of commercial motives in the business world and the rarity of charitable ones, any reliance on gratuitous promises in this context is almost by definition unreasonable.
·         East Providence Credit Union v. Geremia — Defendants gave plaintiff credit union a promissory note secured by a mortgage on defendants’ automobile. The mortgage obligated defendants to maintain insurance and stipulated that plaintiff could pay the premium and add the cost to defendants’ loan. Defendants procured the required insurance, but failed to make premium payments. Defendants and plaintiff received a notice of impending cancellation from the insurer. Plaintiff sent a letter to defendants stating that if the premium was not paid, plaintiff would renew the policy and apply this amount to the loan. Defendant wife contacted plaintiff and indicated that plaintiff should pay the premium. Plaintiff did not pay the premium and, when the automobile was demolished, the insurer refused indemnification. Plaintiff sued to recover the balance on the promissory note. Ct found defendants were justified in believing plaintiffs assurance that it would pay the overdue premium — thus reliance was reasonable and the plaintiffs made a clear promise to pay the premium. Plaintiffs failure to carry out promise justified breach of K … even if Plaintiffs argue there is no K this is a clear case for promissory estoppel and the court held the Defendants had good faith reliance on the promises of the Plaintiffs thus Defendants win!
Promissory Estoppel in Commercial Negotiations