Promissory Estoppel as a Cause of Action in Legal Context
Learn about promissory estoppel as a legal cause of action, its elements, and how it can be applied in cases like Hoffman v. Red Owl Stores. Explore the concept of departure from precedent and implications for liability in contract law.
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Presentation Transcript
Promissory Estoppel As A Cause Of Action Richard Warner
Promissory Estoppel Consideration Doctrine If the promisor should have reasonably expected the promise to induce action or forbearance on the part of the promisee (or third person); and it did induce such action or forbearance, then, the promise is enforceable to the extent necessary to avoid injustice.
As A Cause Of Action (1) The promisor should have reasonably expected the promise to induce action or forbearance on the part of the promisee; (2) it did induce such action or forbearance; (3) causing losses to the promisee.
Hoffman v. Red Owl Stores The contract was to give Hoffman a Red Owl grocery store franchise. The parties never reached final agreement on the deal. At least that is what the jury found. However, Hoffman had a lot of losses incurred in reasonable reliance on Red Owl s representations that he would have a contract with him. Can the court compensate Hoffman for those losses?
Promissory Estoppel As Cause Of Action If there is no final agreement, there is no contract. If there is no contract, there is no liability for breach of contract. Did Hoffman have any traditionally recognized cause of action? Contract: no contract. Tort: no tort committed. Restitution: no benefit conferred by Hoffman on Red Owl. So what did the court do? It let's Hoffman sue on a new theory promissory estoppel.
A Departure From Precedent Traditionally there was no cause of action for injuries sustained merely because you relied on someone else. The someone else has to violate a legal duty before you have a cause of action.
