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CHAPTER 8

Promissory Estoppel as the Basis for Enforcing Promises

§8.1 INTRODUCTION

As Chapter 7 shows, consideration is a prerequisite to a valid contract. A promise that has not been bargained for in exchange for some detriment cannot be enforced as a contract. Of course, as we have seen, consideration doctrine has a degree of flexibility that enables courts to stretch the concept of bargained-for exchange to accommodate some deserving cases. But this only works up to a point. Sometimes the facts are such that no manipulation of consideration doctrine could produce a realistic argument that consideration was given for a promise. In many cases the resulting nonenforcement of the promise is an appropriate consequence, but this result can be unfair when the promisee incurred some loss in relying justifiably on the promise. Promissory estoppel has developed to provide relief in such cases. When all its elements are satisfied, a promisor may be held accountable for a promise without consideration, and the court may enforce it either to the same extent as if a contract was made, or to the extent necessary to remedy the unfair result of reliance on it.

  Promissory estoppel was first articulated as a distinct basis of liability in §90 of the First Restatement. The original formulation, with subtle revisions, survives in §90 of Restatement, Second. Although the Restatement section does not itself call the doctrine promissory estoppel, this name is firmly established by long usage.

  Several factors must be considered in deciding whether promissory estoppel relief is appropriate, as will be discussed shortly. However, its essential elements can be stated simply: A promise coupled with detrimental reliance on that promise. Although these two prerequisites do not always receive the same emphasis, a combination of them must be present for relief to be granted.

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