Promissory estoppel

The Restatement Second of Contracts, section 90 (hereafter Restatement section 90), subdivision (1) provides as follows concerning claims for promissory estoppel:

“A promise which the promisor should reasonably expect to induce action or 905*905 forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.”

California has adopted the Restatement’s view on promissory estoppel claims. (Kajima/Ray Wilson v. Los Angeles County Metropolitan Transportation Authority (2000) 23 Cal.4th 305, 310, 96 Cal.Rptr.2d 747, 1 P.3d 63 (Kajima).) The elements of a promissory estoppel claim are “(1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3)[the] reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance.” (Laks v. Coast Federal Savings & Loan Assn. (1976) 60 Cal.App.3d 885, 890, 131 Cal. Rptr. 836.)

“Promissory estoppel is `a doctrine which employs equitable principles to satisfy the requirement that consideration must be given in exchange for the promise sought to be enforced.’ [Citation.]” (Kajima, supra, 23 Cal.4th at p. 310, 96 Cal.Rptr.2d 747, 1 P.3d 63.) Because promissory estoppel is an equitable doctrine to allow enforcement of a promise that would otherwise be unenforceable, courts are given wide discretion in its application. (C & K Engineering Contractors v. Amber Steel Co. (1978) 23 Cal.3d 1, 7-8, 151 Cal.Rptr. 323, 587 P.2d 1136 (C & K Engineering); see also A-C Co. v. Security Pacific Nat. Bank (1985) 173 Cal. App.3d 462, 472, 219 Cal.Rptr. 62 [“Promissory estoppel has been characterized as a `peculiarly equitable doctrine designed to deal with situations which, in total impact, necessarily call into play discretionary powers'”].) This is confirmed by the last sentence of Restatement section 90 that allows courts to limit the remedy of that section “as justice requires.” (C & K Engineering, supra, 23 Cal.3d at p. 8, 151 Cal.Rptr. 323, 587 P.2d 1136.)

Speak with an attorney today

X