promissory estoppel vs. detrimental reliance

[bella112]

So I'm just trying to step back a little and make sure I have all the big concepts for contracts, so can someone tell me the difference between these two terms? I'm thinking promissory estoppel can be used whether or not the individual who was promised something actually relied on it, whereas to have a claim for detrimental reliance, you must actually have relied on that promise to your detriment in some way? In terms of damages, would you get expectancy damages for promissory estoppel (assuming that promise being enforced created a valid contract) and then for detrimental reliance you would get reliance damages (i.e. whatever you expended in reliance)?

[Jumboshrimps]

Detrimental reliance is an element of promissory estoppel. Damages for PE are reliance damages.

[verbal]

promissory estoppel.

a person makes a promise that he knows or should know will cause someone to act or forebare to act. the person does act or forebare to act based on this promise. The person is harmed for relying on the promise. justice can only be avoided by enforcing the promise.

[drbuff123]

Detrimental reliance is a doctrine by which an offer can not be revoked, promissory estoppel is a substitute for consideration.

[Jumboshrimps]

Detrimental reliance is a doctrine by which an offer can not be revoked, promissory estoppel is a substitute for consideration.

Actually, promissory estoppel is a substitute for a contract, not just for consideration.

In what context would you assert bare detrimental reliance to prevent an offeror from revoking his offer? Presumably, you would be asserting detrimental reliance only if you have acted in reliance on a promise, in which case you would be asserting promissory estoppel, an element of which is detrimental reliance. 

[drbuff123]

(detrimental reliance) Res. 2nd Contracts sec 87(2) - "an offer which the offeror should reasonably expect to induce action or forbearance on the part of the offeree before acceptance, and which does induce such action or forbearance is binding to extent necessary to prevent justice."  Basically, if the offeree has detrimentally relied on the offer and that reliance was reasonably forseeable by the offeror, then the offer is not revocable.  This situation mainly comes up in the contracting business when a general contractor makes a bid to an owner while relying on the bids of sub-contractors.

Promissory estoppel has been taught by my professor as a substitute for consideration... and it makes sense that way.  If there is assent, offer, and acceptance, the contract will fail for lack of consideration because one person has suffered a legal detrimental by their promise, while the other person has suffered no legal detriment.  That is where PE kicks in, if the offeree relied on the promise to their reasonable and forseeable detriment then the agreement can be enforced.  However, if you look at PE as a substitute for a contract in general I do not think it will change the outcome of the analysis either way...it is apples and oranges.

[Dr. Balsenschaft]

I learned the two distinctions by thinking about the causes of action:

Promissory estoppel can be the cause of action. There has been an offer but no acceptance but there was detrimental reliance on the offer and it would be unjust not to enforce offer as an option contract. Limited to reliance damages

Breach can be the cause of action w/ promissory estoppel substituting for consideration when it would be unjust not to enforce the contract due to detrimental reliance. Damages are limited as justice demands.

[Jumboshrimps]

I object. No consideration = no contract. Period.

[drbuff123]

actually I do agree with you that you couldn't refer to it as a legal contract, but it operates the same way

[Dr. Balsenschaft]

Promissory estoppel as the cause of action doesn't exactly fit into contract law b/c there really never is a contract. It exists somewhere between contract and tort but it's taught in contract law.