Know Your Legalese: Promissory Estoppel

Yesterday, I talked about detrimental reliance, which is known to lawyers as promissory estoppel. The reason why lawyers call detrimental reliance by that weird-looking term, promissory estoppel, has to do with the way the lawsuit works operationally in court.  In a typical breach of contract, the nonbreaching party sues for damages under the contract that the breaching party fulfilled to do its obligation.  The nonbreaching party has to prove there was a contract and that to have a contract good consideration needed to be a part of it. In the case of detrimental reliance there is no consideration.  It is just a promise that one party relied on.  Therefore, in a a standard breach of contract suit the nonbreaching party would lose the case.  However, this is where promissory estoppel steps in.  A party that has reasonably relied to their detriment can assert promissory estoppel as the basis of a cause of action for damages.  It operates by estopping the promisor from denying the existence of a contract due to lack of consideration.

Basically, in an employment type of situation it goes like this, "Hey, you cannot say there wasn't a contract. I moved across the ocean to work here because of what you promised."  Even though the speaker, gave no consideration to the prospective employer, he is saying that due to a promise he changed his position (he moved).

*That it is why, in my opinion, promissory estoppel is a contract-like situation because there is no consideration. We are using a legal device (promissory estoppel/detrimental reliance) to enforce a promise where no consideration has been given between the parties, only a promise.

*Disclaimer:  This post discusses general legal issues, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction.  Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.