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Promissory Estoppel

Reviewed by Sweta | Updated on Sep 30, 2020

Catalogue

Introduction

Promissory estoppel is a doctrine in contract law which enforces a promise whether executed as a contract or not. The doctrine seeks to protect the rights of a promisee or aggrieved party against the promisor.

Understanding Promissory Estoppel

Promissory estoppel applies when the promisor has made a promise to the promisee. The promisee must have relied on the promise and suffered a loss due to non-performance of the contract. The doctrine prevents the promisor or enterprise from going back on their word or promise.

For example, a vendor makes an oral promise to the customer to replace the goods if they do not fit the customer size requirements. The customer purchases the clothes and takes them home. However, the customer proposes to return the clothes to the vendor relying on the vendor oral promise. Here, the vendor is estopped from refusing the clothes returned.

The doctrine of promissory estoppel varies from country-to-country. The doctrine is part of the law in the United States and other countries. The promise is enforceable without consideration.

Factors to Consider

  1. The doctrine seeks to enforce a promise made under a contract, whether oral or in writing.

  2. The promisee should have suffered an economic loss. The promisee or aggrieved party can recover damages from the promisor for any losses incurred as a result of the contract.

  3. A formal consideration is not required from the promisor to the promisee under the contract.

  4. The promise should be one on which a reasonable man could have relied on. The promisee should have acted reasonably and relied on the promise.

  5. The doctrine enables the injured party or the promisee to recover on a promise. The necessary conditions for making a claim under the doctrine of promissory estoppel are there should be a promisor, a promisee, and the promisee should have suffered a loss.

  6. Courts will enforce the doctrine of promissory estoppel if the performance of the promise is the only way of granting justice to the aggrieved party or the promise.

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