Promissory Estoppel Definition

By Marie Huntington
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The doctrine of promissory estoppel serves the purpose of enforcing a contract between two parties when the contract is otherwise unenforceable. On the other hand, an enforceable contract must meet certain elements to become legally binding. Therefore, a legally binding contract is enforceable in court, but courts may uphold an unenforceable contract when one party shows reasonable reliance on the other party’s promise.

Enforceable Contract

A legally binding contract occurs when one party makes an offer and receives an acceptance from the other party. In addition to an offer and acceptance, consideration must be present to make the contract legally enforceable. In legal terminology, consideration is a “bargained for exchange.” In other words, consideration is present in a contract when both parties exchange promises. One party promises to do something in reliance on the other party’s promise to something. For instance, one party to a contract promises to paint a house in reliance on the party’s promise to pay a certain amount at the conclusion of the job.

Unenforceable Contract

Courts will uphold a legally enforceable contract when the elements of a contract have been established. However, when consideration is absent in a contract, it becomes unenforceable in law. Therefore, the law generally does not provide a remedy for an unenforceable contract. Fundamentally, consideration is absent in a contract when it lacks a “bargained for exchange.” However, a court will determine whether a contract is deemed enforceable based on the specific facts in the case.

Meaning of Promissory Estoppel

A court will enforce an unenforceable contract, when the elements of promissory estoppel are established. As a whole, when one party makes a promise knowing that the other party has reasonably relied on the promise, and the other party actually does some action in reliance on the promise, courts may uphold the promise under the promissory estoppel doctrine. Even if one party has reasonably relied on the other party’s promise, the specific facts in the case must actually establish the elements of promissory estoppel before the contract becomes enforceable in law.

Equitable Justice

The doctrine of promissory estoppel does not substitute for consideration in a contract. The doctrine merely provides an equitable remedy, when justice would be served upon enforceability of the contract.

Limitations

The doctrine of promissory estoppel may not make the total contract fully enforceable. The promises within a contract will be enforced under the promissory estoppel doctrine, when enforcing the contract promises avoids injustice.

About the Author

Marie Huntington has been a legal and business writer since 2002 with articles appearing on various websites. She also provides travel-related content online and holds a Juris Doctor from Thomas Cooley Law School.