By law, a promise that was made becomes enforceable, even when it's made without any formal considerations. In essence, when someone makes a commitment to someone who goes on to rely on that promise, only to experience some sort of detriment, promissory estoppel may be enforced. This principle was created in order to prevent a promisor from arguing against the enforcement of their former promise. Let's say Mr. Smith has a contract to create a movie. As such, he decides to hire an artist to paint the set and agrees to pay him a portion of the profits.
If the artist goes on to paint the entire set and then Mr. Smith reveals he never even had a contract, and there are therefore no proceeds to share, the artist may decide to sue him.
In this instance, a judge may find that Mr. Smith can't deny he had a contract with the painter, and the artist will likely receive a judgment providing compensation for his work. Certain legal requirements must be fulfilled in order to trigger a promissory estoppel. Of course, at its base, there must be someone making a promise, a promisee, and some type of detriment suffered by the promisee.
Here are five legal elements of a promissory estoppel:. Here's another example of a promissory estoppel. Let's say an employer entered into a verbal agreement with an employee, whereby they would pay that employee an agreed-upon amount throughout the duration of their retirement. If that employee then proceeds to file for retirement, based on the promise made by the employer, the employer could be legally estopped from not delivering on the payments throughout the course of the former employee's retirement.
You will come across promissory estoppel most commonly in the field of contract law. The entire premise surrounding a contract involves two parties who negotiated an agreement based upon a promise. Measure content performance.
Develop and improve products. List of Partners vendors. Promissory estoppel is the legal principle that a promise is enforceable by law, even if made without formal consideration when a promisor has made a promise to a promisee who then relies on that promise to his subsequent detriment. Promissory estoppel is intended to stop the promisor from arguing that an underlying promise should not be legally upheld or enforced.
The doctrine of promissory estoppel is part of the law in the United States and other countries, although the precise legal requirements for promissory estoppel vary not only between countries, but also between different jurisdictions, such as states, within the same country. Promissory estoppel serves to enable an injured party to recover on a promise. There are common legally required elements for a person to make a claim for promissory estoppel: a promisor, a promisee, and a detriment that the promisee has suffered.
An additional requirement is that the person making the claim—the promisee—must have reasonably relied on the promise. In other words, the promise was one that a reasonable person would ordinarily rely on.
Another requirement further qualifies the required detriment component; the promisee must have suffered an actual substantial detriment in the form of an economic loss that results from the promisor failing to deliver on their promise. Finally, promissory estoppel is usually only granted if a court determines that enforcing the promise is essentially the only means by which injustice to the promisee can be rectified.
An example of promissory estoppel might be applied in a case where an employer makes an oral promise to an employee to pay the employee a specified monthly or annual amount of money throughout the full duration of the employee's retirement. If the employee then subsequently retires based on a reliance on the employer's promise, the employer could be legally estopped from not delivering on his promise to make the specified retirement payments.
Contract law generally requires that a person receive consideration for making a promise or agreement. Legal consideration is a valuable asset that is exchanged between two parties to a contract at the time of a promise or agreement.
Ordinarily, some form of consideration, either an exchange of money or a promise to refrain from some action, is required for a contract to be legally enforceable. However, in attempting to ensure justice or fairness, a court may enforce a promise even in the absence of any consideration, provided that the promise was reasonably relied on and that reliance on the promise resulted in a detriment to the promisee.
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Key Takeaways Estoppel is a legal principle that keeps people and businesses from, essentially, going back on their word or promise.
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