To establish a claim based on promissory estoppel a plaintiff must allege and prove that: (1) defendants made an unambiguous promise to plaintiff; (2) plaintiff relied on such promise; (3) plaintiff's reliance was expected and foreseeable by defendants, and; (4) plaintiff relied on the promise to its detriment. Plaintiff's reliance must be reasonable and justifiable. Plaintiff may recover on a theory of promissory estoppel despite the absence of a contract.
An airline and its general contractor hired the subcontractor to do certain work on a construction project. A dispute arose and the subcontractor filed an action for breach of contract. The airline and the general contractor claimed that no contract had been entered. The subcontractor based his cause of action on a letter of intent between the parties. The trial court dismissed the action but on appeal, the Court of Appeals held that although letters of intent were enforceable, such letters were not necessarily enforceable unless the parties intended them to be contractually binding.
Was the letter of intent an enforceable contract?
The court found that the letter of intent was ambiguous regarding the parties' intent to be bound. The court reasoned that although the letter of intent included detailed terms of the agreement, the letter also referred several times to the execution of a formal agreement, thus indicating that the intent was not to be bound by the letter. Therefore, the court concluded that on remand the circuit court should allow the parties to present parol evidence regarding intent.