What Is Promissory Estoppel?
Promissory estoppel is a principle that bars a party from backing out on a promise once the other party has relied reasonably on it and incurred a loss. It provides fairness by enforcing promises even in the absence of a formal contract.
Elements Of Promissory Estoppel
- Clear and definite promise: one party should make a clear promise.
- Reliance on the Promise: The other party must take action or refrain from acting based on the promise.
- Detrimental Change: The party relying on the promise must experience a loss or disadvantage.
- Unfairness if Revoked: It would be unjust to allow the promisor to go back on their word.
Applicability Of Promissory Estoppel in India
In India, the Supreme Court has established and affirmed the law of promissory estoppel in numerous judgments. It comes into play in cases where citizens or businesses take action based on government or private assurances. It cannot be enforced if enforcing it goes against statutory provisions or public interest.
Limitations Of Promissory Estoppel
- It is not applicable if enforcing the assurance would be against the law.
- A government entity may not be bound by it if the public interest demands otherwise.
- It cannot be applied to form new obligations under contract but can be utilised to stop a party from revoking a promise already given.
Advantages Of Promissory Estoppel
- Promotes justice and prevents injustice.
- Protects individuals and businesses from loss due to failed promises.
- Enhances business and government transactions confidence.
Key Takeaways
Promissory estoppel stops a party from revoking a promise when the other party has acted in reliance on it to their detriment. It is extremely prevalent in India but has its limitations, especially with regard to legality and public interest. Its major advantage is ensuring fairness and safeguarding people against losses because of promises that have been broken.
