D & G Stout, Inc. v. Bacardi Imps., Inc.

923 F.2d 566 (7th Cir. 1991)

 

RULE:

A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee and a third person and which does induce such action or forbearance is binding if injustice can be avoided only by the enforcement of the promise. The remedy for breach may be limited as justice requires. 

FACTS:

Appellant sold liquor during a particularly difficult time in that market and thought about selling its business when only two distributors remained to supply liquor to appellant. Appellant negotiated with a potential purchaser and at the same time sought assurances from appellee distributor that appellee was not planning to end its relationship with appellant. Appellee assured appellant time and again that it was planning to supply appellant with liquor into the future and appellee knew appellant was considering selling its business. Appellant decided not to sell based largely on appellee's oral assurances and the next day appellee stopped providing product to appellant. Appellant was then forced to sell its business at a price significantly lower than it could have received only days earlier and appellant brought an action against appellee based in promissory estoppel. The trial court granted appellee summary judgment and appellant challenged that ruling. On appeal, the court reversed and the action was remanded for further proceedings.




ISSUE:

Can appellee be held liable for damages for breach due to promissory estoppel?

ANSWER:

Yes.

CONCLUSION:

The court found that where appellee assured appellant it would not end their relationship but then did so one day later, that assurance might have been reasonably relied upon by appellant.

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