Posted in Blog  
  on Jan 29, 2015

Elements of a Promissory Estoppel

An estoppel is just a legal term that essentially means that something must be stopped. In terms of a promissory estoppel, it serves as a consideration substitute. This means that in contract law, there are certain promises that are enforceable and binding, even if they are lacking in consideration in some way. In basic terms, it means that someone cannot deny that a contract exists simply because they have a lack of consideration for it. When it comes to the elements of a promissory estoppel, there are three basic elements to it. 1. There must be a promise that is expected to produce an action or a forbearance when made by the promissor. 2. There must be an action or a forbearance taken by the promisee in this relationship that is based on the reliance of the above promise. 3. The only way to avoid injustice in this contract matter would be to enforce the promise that was made, even if it was only an implied promise. The overall goal is to make sure that justice is served. If it can be served without the need to enforce the promise, then the promissory estoppel may not be valid. If it cannot, then this principle will apply.

What Are Some Examples of a Promissory Estoppel?

Paul is an alumni to the University of Wisconsin. He has promised to pay the University $10,000 if it will remodel a home that is on campus grounds and then name it after him. After making this promise, Paul realizes that he doesn't want that cash going to the college because it is supporting research that he finds to be religiously offensive. He withdraws the promise of funding. Paul's promise of $10k, however, is considered a legal and binding contract if the University fulfills the stipulations made to get the money. Jane is a landlord who has just approved her first tenant. She advertised the property at $1,200 per month, but when speaking to the tenants, they said that they could only pay $1,000 per month. Jane agrees and approves the lease without the actual monthly rent being listed in the agreement. According to promissory estoppel, Jane can no longer charge $1,200 per month for rent because she promised to let the tenants pay $1,000 per month instead.


There are instances where the promise isn't enforceable. If Jane later discovered that her home needed remodeling work after the tenants left, she would ask for bids to get the best work at the lowest price. A contractor might submit the lowest bid, but then realize they made an error in their calculation and withdraw the bid. If Jane has accepted the bid because it is the lowest and the contractor refuses to perform because of the error, then it may be ruled that more injustice would be served by forcing an error in judgment to be performed than Jane receiving a lower rate. As with any legal matter, there is not a 100% guarantee in ruling if promissory estoppel is being considered. If you make a promise to someone, however, many jurisdictions see that as a binding contract that will be enforced.


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