He who by his language or conduct leads another to do what he would not otherwise have done, shall be liable to that other person after disappointing the expectations upon which he acted. This remedy is always so applied as to promote the ends of justice.
Appellees sued appellants for breach of contract. The trial court found appellants, by their representations and conduct, induced appellees to incur expenses in preparing for business under a franchise that was never granted. The trial court held even though no contract had been proven, appellants were estopped from denying one existed, and judgment was entered for appellees for the amount covering their cash outlays and anticipated profits from the sale of radios. Appellants sought review of the decision.
Does a representation of a company to grant franchise, which it does not later grant after the franchisee assumed expenses, give rise to a claim for damages?
Any misrepresentation by a party deceiving another causing detrimental reliance is liable for damages. Judgment that appellants wee estopped from denying that a contract existed was affirmed. However, the court modified damage judgment to include only the loss sustained by expenditures made in reliance on the assurance of the franchisor, not the anticipated loss of profits on the sale of the goods.