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Hoffman v. Red Owl Stores, Inc.

Melissa A. Hale

ProfessorMelissa A. Hale

CaseCast "What you need to know"

CaseCast –  "What you need to know"

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Hoffman v. Red Owl Stores, Inc.
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    Brief Fact Summary. Plaintiff owned a bakery but wanted to operate Defendant grocery store franchise. Defendant representative strung him along and gave advice in how to make it happen, promised that it was set to happen and Plaintiff sold his bakery and moved in reliance on the promise. Defendant had made numerous promises but not enough that would establish a contract to establish a store that Plaintiff would run.

    Synopsis of Rule of Law. Promises that a party can reasonably expect will be relied upon, are relied upon may be enforced to prevent injustice even if the promise itself would not be sufficiently definite to meet the requirements to form an offer for a binding contract.

    Facts.
    First, on suggestion, Plaintiff bought a small grocery store to get experience and then sold it on the advice of Defendant representative, Lukowitz and possible lost some lucrative profits in so doing.
    Then, Plaintiff bought a lot selected by Defendant moved his family to the area and sold his bakery in reliance on statement to “get money together and we are set.”
    A number of agreements to get the grocery store up and running failed. Plaintiff rejected a final arrangement which would require his father-in-law to loan money as gift rather than a partner. Negotiations broke down.

    Issue. Whether the promise necessary to embrace a cause of action for promissory estoppel must contain all the essential details of a proposed transaction necessary to be equivalent to an offer that could form a binding contract if the promise were to accept the same.

    Held. Promissory estoppel could be invoked when necessary to avoid injustice. Restatement Section 90 does not require the promise to meet the requirements of an offer that could ripen into a contract. Rather here since it was shown that the promisor could reasonably expect the promises to induce action, the promise did induce the action and injustice could only be avoided by enforcement of the promise. Defendant had to pay the amounts lost by the plaintiff due to his reliance on their unkept promises.

    Discussion. Promissory estoppel embraces some discretion on when it is necessary to avoid injustice. In such a case, a court will not adhere to the formal requisites of contract formation, but will examine facts to determine whether it is necessary to enforce some promises in the interest of justice.


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