Reliance

There are two types of reliance damages that a party can incur. The first type involves actions done in reliance upon a valid and binding contract that is subsequently breached. In either case, the goal of the court is to put the nonbreaching party in as favorable a position as he enjoyed prior to the contract. Reliance damages are usually awarded if expectation damages are too uncertain. The second type involves the doctrine of promissory estoppel and results when there is no valid contract, but a party detrimentally relied on another’s promise, and it is unfair not to enforce the promise (Rest. 2d. § 90).

A. Requirements

Mnemonic: Robin hood Finds Danger Inviting To recover for reliance a party must show:

1.
That there was actual Reliance on the contract or promise,

2.
That the reliance was Foreseeable to the breaching party,

3.
That it was clearly Detrimental, and

4.
That Injustice can only be avoided by enforcement.