Benefits Of Promissory Estoppel

Promissory Estoppel Good business practices are important in the business world to maintain a positive environment and bring benefits to both the parties involved in business. But unfortunately not all business promises are kept and maintained and in such a situation, promissory estoppel plays the role of a signature where the parties guilty are restricted by default. Promissory estoppel acts as an invisible signature. However, there exists a traditional contract where when a promisor doesn’t keep back his promise the promisee can sue him to court but this promissory estoppel has a fair treatment to both the parties in case of breach of contract. Promissory estoppel is useful in construction companies as there are many promises made between

It is where the promisor (the one making a promise) makes a promise to the promise that in turn depends on his or her damage. This statement, “promissory estoppel” stops the promisor to refuse from the words that he has given. This is a legal document of proof in the United States and many other countries. This helps the party to recover the promise that he had made and it stops him from arguing against his words that he made. The promise made was reliable and reasonable. The promissory estoppel has three important elements: the promise, the promisor and the detriment (the loss that can happen to the promise if the promisor refuses to follow the promise In other words it is the recovery based on a promise made with the promise when the promise is reasonable and can be depended on. In our everyday lives when such a promise is made between two people and the second person does not show up, we simply go ahead with our life. But in business terms, this cannot happen. The first party can make a promissory estoppel and can rely on it. If the second party does not act according to the words made in promise, the first party has the right to sue him even without the contract taken place between

This document is used in absence of contract between the two parties. (Doctrine of Promissory Estoppel: Definition, Examples & Elements, 2015)

There are certain elements to be in Promissory Estoppel:

1- A contractual relationship to exist between the parties.

2- A promise made where the given circumstances, the second party will assume the promise is made and will be kept in future.

3- The party which is depended on the promise must have damage caused.

4- The party must be in bad situation due to breaking of this promise. In simple words there shall be a loss happened.

5- There shall be no general restriction for the person breaking his promise. (Brown, 2014) There were several cases of promissory estoppel one of which is famous is the case of Mclntosh v. Murphy (1970) where there was just a verbal consideration to hire the plaintiff in an auto dealership workshop in Hawaii for a year but when the plaintiff arrived spending on ticket and other expenses he was fired within the two months of joining. However, the decision given by the court was in favor of the defendant, the owner of auto dealer shop who hired the plaintiff because he kept his promise to hire him. After reaching Hawaii and starting the work practically, maybe he found the plaintiff not capable and responsible of doing the job. (Doctrine of Promissory Estoppel: Definition, Examples & Elements,