Be careful what you promise, because your promise could be legally binding. That, in a nutshell, is the legal principle known as promissory estoppel.
While consideration is an important element of an enforceable contract, the doctrine of promissory estoppel is an exception to this rule because the promise is legally enforceable even without consideration. So, if someone relies on a promise to his or her detriment, they may have a legal right to compensation for any damages suffered in reliance on the promise.
In order for promissory estoppel to apply, certain elements must be present:
- A person makes a promise to another.
- The promisor should reasonably expect that the promisee will be induced to act in reliance on the promise
- The promisee relies on the promise to his or her detriment.
- Injustice can be avoided only by enforcement of the promise.
Most courts limit the plaintiff’s recovery to reliance damages rather than ordering the defendant to do what was promised. For example, if the owner of a tech company promises company stock to a programmer if he joins the team, in reliance on which the programmer quits his six-figure job only to be denied the stock shortly after joining the new company, the plaintiff will be entitled to any lost income in quitting his old job (as well as any other reliance damages). But he is unlikely to get the promised stock.
Williams Commercial Law Group, L.L.P., has the experience and reputation that you want when you are dealing with a business-related lawsuit. We are here to obtain the best possible outcome for your situation. Do not hesitate to contact Williams Commercial Law Group, L.L.P., at (602) 256-9400, and see how we can help you resolve your legal matter.