State Bank of Standish v. Curry - 442 Mich. 76, 500 N.W.2d 104 (1993)

Rule:

If the parties have left open some matters to be determined in the future, enforcement is not precluded if there exists a method of determining the terms of the contract either by examining the agreement itself or by other usage or custom that is independent of a party's mere wish, will, and desire. An enforceable agreement may be found even though the determination is left to one of the contracting parties as long as he is required to make it in good faith in accordance with an existing standard or with facts capable of objective proof. The scope of an oral promise may also be identified by referring to the facts surrounding the loan where there exists a previous course of dealing between the parties, thereby supplying some objective method by which the missing terms could be supplied. 

Facts:

Defendants Robert and Kathleen Curry were dairy farmers. Beginning in 1975, defendants annually obtained funds from the plaintiff State Bank of Standish to purchase seed, fertilizer, and chemicals for spring planting. During their annual conversation with plaintiff’s officers, and at a time when their outstanding loan was not in default, defendants discussed the recent economic downturn and asked whether the dairy operation would continue to be supported by plaintiff. The plaintiff bank officers stated that they would continue to provide such support, but later argued that the assurances were not made in the context of a specific loan. After the defendants defaulted on an outstanding promissory note, plaintiff bank filed an action for claim and delivery, defendants in their counterclaim, alleged economic and emotional damages arising from breach of the plaintiff’s duty of good faith and fair dealing, fraud, duress, and promissory estoppel. The trial court granted the plaintiff’s motion for summary disposition pursuant to MCR 2.116(C)(8) on all counterclaims except promissory estoppel. The court also found no defense to the plaintiff’s claim and delivery action, but stayed judgment until after trial for the purpose of setoff, if any. The Court of Appeals agreed that there was no evidence of a clear and definite promise by it to make the loan.  Thus, the appellate court reversed the trial court's judgment in favor of the defendants on the promissory estoppel claim, and affirmed the summary disposition on the fraud, duress, and good-faith and fair-dealing claims.

Issue:

Did the appellate court err in reversing the trial court’s judgment on the promissory estoppel claim?

Answer:

Yes.

Conclusion:

The court held that although it upheld the grant of summary judgment for plaintiff on its action for claim and deliver, the court determined that the promissory estoppel ruling in favor of defendants was improperly overturned. The court ruled that, objectively viewed, the jury was entitled to find that the plaintiff bank officer’s statements were not merely words of assurance or statements of belief, but of a promise of future action. Thus, the reviewing court concluded that where the parties had left open some matters to be determined in the future, enforcement of a promise was not precluded if there existed a method of determining the terms of the contract either by examining the agreement itself or by other usage or custom.