Promissory estoppel elements must be present in order for promissory estoppel to go into effect. Promissory estoppel is a doctrine that has its foundation in contract law and usually occurs in business transactions when a promise between two parties isn't kept.

The definition of a promise is a written or verbal assertion made by one party to another in exchange for something of value, or consideration, for which the promisor performs an act, which gives the promisee a legal right to expect the promise or act to happen. When the promise isn't carried out as stated, promissory estoppel prevents injustice to the injured party.

What is Promissory Estoppel?

Estoppel is a legal term meaning that something is automatically stopped. According to the principle of promissory estoppel, a promise is a type of legal contract or agreement that is supported by consideration and can be legally enforced. The principle maintains that a promise is upheld even though some promises aren't in the form of a legal contract or agreement or aren't supported by consideration because the promise itself acts as a substitute for consideration. Promissory estoppel stops the injustice that occurred to the promisee when the promise wasn't carried out by the promisor, thus incurring damages.

In the simplest terms, promissory estoppel means that one party can't recant or reject the existence of a contract, or promise, because doing so would discount the consideration involved. As stated previously, the promise compensates for the absence of consideration. The promissory estoppel doctrine makes it possible for the injured party to get restitution from the party that broke the agreement. Estoppel prevents, or stops, a promisor from claiming a truth that contradicts an already existing fact.

Elements of Promissory Estoppel

In order for promissory estoppel to go into effect, the following terms must be met:

  • A legal relationship of some kind must either already be present or be foreseen to occur between the parties. This legal relationship usually constitutes a contractual relationship. Parties involved in pre-contractual mediation fail when the terms of this doctrine are not met because it is unenforceable.
  • A legal contract begins when a promise is made by one party to another. In the past, estoppel could initiate based on a depiction of a viable fact. However, this standard changed when the court ruled in the case of Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 and allowed the doctrine to extend to possibilities of prospective conduct. This variation of “promissory estoppel” happens when the promise made in situations cause the other party to believe that the promise will materialize. 
  • The receiving party depends on the promise. The party who depends on the unfulfilled promise has to experience detriment.
  • There is the occurrence of detriment. The party depending on the execution of the promise which was didn't come to fruition would have to endure some type of detriment like damage, harm, or other kinds of loss to themselves or to their property. The detriment would have to cause the party to have a worsened stance than before the promise took place and because he depended on the promise that never materialized.
  • There is unconscionability. Basically, there is no restriction that stops a party from breaking their promise. However, for an initiation of estoppel to occur and be successful, it has to be apparent that — given the details of the situation— it would be unjust or prejudiced to permit the promisor to break the promise they made. 

More Questions About Promissory Estoppel Requirements

Promissory estoppel permits a wronged party to recoup the advantage of a promise made by the other party who doesn't fulfill their promise,  even if there was no legal contract between the parties. The effectiveness of promissory estoppel depends on the significance of loss the promisee has experienced. For promissory estoppel to be enforceable, specific elements must be present. Promissory estoppel sometimes occurs in business transactions, so it is helpful to recognize it to safeguard yourself from possible repercussions by knowing the promissory estoppel elements.

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