§ 10.01 Defined

When a promisee foreseeably relies to his detriment on the promisor's promise, even in the absence of an enforceable contract, the doctrine of promissory estoppel may be invoked to make such promise binding in order to prevent injustice. The remedy in such cases is based on the extent of the promisee's reliance, not his expectation. The Restatement, Second, eliminated the requirement from the Restatement, First, that the detriment be "substantial." [Restatement § 90(1)]

§ 10.02 Applicability of Doctrine

Examples of situations in which promissory estoppel may be applied include:

1)  intra-family promises [e.g., Ricketts v. Scothorn, 57 Neb. 51 (1898)]

2)  Philanthropic subscriptions made to educational, charitable or religious organizations

3)  Promises to make a gift of land where the promisee takes possession of the land and makes improvements upon it, with the knowledge and assent of the promisor

4)  Promises made by a bailee relating to bailed goods and on which the bailor relies

5)  Offers that become irrevocable by virtue of the reasonably foreseeable inducement of an action or forbearance of a substantial character on the part of the offeree before acceptance [Restatement § 87(2)], e.g., where a general contractor receives bids from a subcontractor and relies on such bid in preparing its own bid for a project

6)  Contract modifications where one party materially changed position based on it [Restatement § 89(c)]

7)  Preliminary contract negotiations where one party encourages the other to engage in activities that would facilitate entering into a contract but which would be detrimental to such party if the transaction is not in fact consummated, e.g., relocation, purchase of property, or borrowing money [see, e.g., Hoffman v. Red Owl Stores, 26 Wis. 2d 683 (1965)]

8)  Extensive contract negotiations in which one party gradually increasingly commits itself in reliance on the negotiations resulting in a binding contract, the other party negotiates through a low ranking representative who lacks full authority to seal the agreement

9)  Indefinite contracts that are too vague to be enforced but for which the courts may award reliance damages

10)  Letters of intent upon which one party justifiably relies in the belief that the transaction will occur but it does not when the other party abandons the negotiations