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Author Topic: Detrimental Reliance Hypo  (Read 4144 times)

joshdelight

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Detrimental Reliance Hypo
« on: November 10, 2004, 10:46:48 PM »
...Or "promissory estoppel," if you prefer.  :)  Either way, it's bound to generate some discussion.
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A wealthy uncle promises to pay $10,000 to his niece upon her completion of the bar examination so that she may have a fine vacation.  After the bar, the niece travels throughout Europe and has a wonderful time.  She has not kept an account of her expenditures.  The uncle refuses to pay.  What is the niece's recovery?
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Okay... this case calls for analysis using theory of detrimental reliance.  Therefore our rule is: a promise which the promisor should reasonably expect to induce action on the part of the promisee and does in fact induce such action is binding if injustice can be avoided only by enforcement of the promise.  The remedy granted for breach may be limited as justice requires.

So, I see (1) a promise that is pretty damn sweet, and the uncle should reasonably expect the niece to act on it. (2) The niece did act on the promise, and had herself a fine vacation. (3) I am not so sure that injustice can be avoided only by enforcing the promise, as the niece's reliance was substantial in nature but because she did not keep records of her expenditures, there is a serious problem with how definite her reliance on his promise was. She might have spent $1000 for a European vacation package. Absent a reason to do otherwise, courts utilizing a detrimental reliance theory will generally only award reliance damages.  As she did not keep records, these damages are not determinable, and therefore, the uncle should prevail.

Tell me I'm wrong... I dare ya!  ;)
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jeffjoe

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Re: Detrimental Reliance Hypo
« Reply #1 on: November 10, 2004, 10:50:05 PM »
Even without receipts, the cost of the trip can be determined with some accuracy.  At the least the figure $10,000 could be used.

But what about this question?  Was it really to her detriment?  She had a nice vacation that she will have to pay for herself.  Just like most other people.  So where's the detriment?  What did she give up?
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joshdelight

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Re: Detrimental Reliance Hypo
« Reply #2 on: November 10, 2004, 11:14:52 PM »
Even without receipts, the cost of the trip can be determined with some accuracy.  At the least the figure $10,000 could be used.

But what about this question?  Was it really to her detriment?  She had a nice vacation that she will have to pay for herself.  Just like most other people.  So where's the detriment?

Good points.  Regarding the costs - I don't think the court would use the $10,000 figure unless the evidence reasonably demonstrated that in relying upon her uncle's promise, she incurred expenses close to that amount.  I am not sure if you meant that the $10k could be used as a basis for determining her costs or that it could be used to determine the damages she's due (if she's due them).  To award the niece $10,000 absent evidence showing her spending close to that amount in reliance would be to award an expectation interest.  If the uncle's promise was supported by consideration, that'd be fine, but it's not, so they can only award damages for her reliance. Granted, the information in this hypo is lacking; I am operating on the assumption that the value of her reliance cannot be determined because she did not document her expenditures for an international vacation.

The detriment is her going on a vacation when she did not have to go on vacation; she could have spent time volunteering in Gambia, but she got a sweet promise from her unk that she chose to act upon. The plaintiff would argue that since she knew of the promise and acted in reliance on the promise, that the act itself was a detriment. With detrimental reliance, it is only required that the promise must induce the detriment.
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jeffjoe

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Re: Detrimental Reliance Hypo
« Reply #3 on: November 10, 2004, 11:16:44 PM »
Going on a vacation is a detriment?  I don't think so.

Vacations are by definition enjoyable, so the vacation itself is not a detriment.

The cost of the vacation is not a detriment, because it is reasonable to have to pay for your own vacation.

I don't think a court would buy the argument that she wouldn't have taken the vacation and that's the detriment. 

Now if taking the vacation caused her to miss other opportunities that are no longer available.....
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jeffjoe

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Re: Detrimental Reliance Hypo
« Reply #4 on: November 10, 2004, 11:23:32 PM »
And did the uncle induce her to take the vacation?  Perhaps she had planned a vacation anyway.  We don't know either way.
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camelbx

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Re: Detrimental Reliance Hypo
« Reply #5 on: November 10, 2004, 11:28:29 PM »
You don't need a bargained away "detriment" for promissory estoppel.

1. Promise? Yes.
2. Reliance? Yes, her trip.
3. Promise induced reliance? Rresumably she would not have tripped if he hadn't promised.
4. Reliance Foreseeable by promisee? Of course.
5. Injustice... has 3 elements according to Restatement 90.
 A. Formality-- not met here but a specific amount is cited so its so-so
 B. Specific and substantial character of rememdy in relation to promise? certainly.

camelbx

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Re: Detrimental Reliance Hypo
« Reply #6 on: November 10, 2004, 11:30:31 PM »
You don't need a bargained away "detriment" for promissory estoppel.

1. Promise? Yes.
2. Reliance? Yes, her trip.
3. Promise induced reliance? Rresumably she would not have tripped if he hadn't promised.
4. Reliance Foreseeable by promisee? Of course.
5. Injustice... has 3 elements according to Restatement 90.
 A. Formality-- not met here but a specific amount is cited so its so-so
 B. Specific and substantial character of rememdy in relation to promise? certainly.
 C. Resonableness of reliance? I don't see why not, unless the uncle was poor and was obviously not serious.

... This looks good, check out Hamer v. Sidway I believe that one today would be considered a "Promissory Estoppel" case, Further.... we could even argue that its an agreement with consideration if the uncle "bargained for" a lawyer in the family from which he would gain benefit....

In any case there's no need for detriment in promissory esoppel.

jeffjoe

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Re: Detrimental Reliance Hypo
« Reply #7 on: November 10, 2004, 11:31:45 PM »
But did she rely?  Was her vacation conditional to his promise?  We don't know these things.

And is forcing the uncle to pay for the vacation the only way to avoid injustice?  Is it in fact an injustice for her to pay for her own vacation?
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camelbx

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Re: Detrimental Reliance Hypo
« Reply #8 on: November 10, 2004, 11:43:53 PM »
Presumably, at least in part, if she did not why would she want the money now?

In other words if she did not rely on his promise for her trip why is she asking for money if she was planning on paying for it anyway?

Yes, forcing her uncle to act under the promise he gave to forseeable and reasonable ends is the only way to avoid injustice.

This is also probably a SOF problem.

jeffjoe

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Re: Detrimental Reliance Hypo
« Reply #9 on: November 10, 2004, 11:47:38 PM »
She's asking for the money because she thinks she can get it.  Asking for the money doesn't prove she relied on it or that she wasn't going to take the vacation anyway.

And I'll ask again.  Is it an injustice for her to pay for her own vacation?
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