Promissory Estoppel Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Promissory Estoppel, written in plain English, along with examples of how it is used.

What is Promissory Estoppel?

It refers to the promise wrongly or falsely made by a person to another person, depending on which, the other person relied on the promise and suffered an economic loss.The sufferer can enforce such false promise in court and judge would believe the statement made by the promisor as promise and order for the payment for the value of work of the sufferer.Off course it would depend on the actual element present such as , false statement of promise, promissor’s inability to deny that such statement was made by him/her, enforcement and establishment of the facts.

History and Meaning of Promissory Estoppel

Promissory estoppel is a legal principle that originated in the United States in the early 20th century. It allows a party to enforce a promise made to them by another party, even if no formal agreement was made. This is based on the idea that it would be unfair to allow the promisor to renege on their promise after the promisee has relied on it to their detriment. In other words, promissory estoppel acts as a substitute for consideration in forming a contract.

In order for promissory estoppel to be invoked, several conditions must be met. First, there must be a clear and definite promise made by the promisor to the promisee. Second, the promisee must have reasonably relied on the promise to their detriment. Third, it must be unconscionable to allow the promisor to go back on their promise. Finally, the remedy sought by the promise must be limited to what is necessary to avoid injustice.

Examples of Promissory Estoppel

  1. John promises to pay Jane $1,000 if she completes a work project by a certain date. Jane works hard and completes the project, but John refuses to pay. Jane can rely on promissory estoppel to enforce the promise and seek payment.

  2. A university promises a student a scholarship for four years of study based on their academic performance. After the student has completed two years, the university tries to revoke the scholarship. The student can rely on promissory estoppel to enforce the promise and continue receiving the scholarship.

  3. A company tells an employee that they will receive a bonus at the end of the year if they meet certain performance targets. The employee works hard and meets the targets, but the company refuses to pay the bonus. The employee can rely on promissory estoppel to enforce the promise and receive the bonus.

Legal Terms Similar to Promissory Estoppel

  1. Consideration: This is the idea that something of value (usually payment) must be exchanged between parties in order for a contract to be formed.

  2. Equitable Estoppel: This is similar to promissory estoppel, but it applies when a party has made a misrepresentation that another party relied on to their detriment.

  3. Quasi-contract: This is a legal fiction used to enforce a contract-like obligation where no actual contract exists.