Promissory Estoppel And Postponed Bargains

Front 1

Family promises

Back 1

usually evaluated on the relationship between the parties because feelings of affection and altruism define families rather than quid pro quo in return

Front 2

Kirksey (AL SC) (traditional)

Back 2

a widow was sent a letter that stated that if she would sell her land, her brother-in-law would give her land to raise the children....this was viewed by the court to not be a promise but rather gratuity... because of the family nature of the relationship, consideration, legal detriment, were not considered as much

Front 3

Promise elements

Back 3

when a promise is made, it has to be DEFINITE and defined... it needs to be specific.
Also, a court may only choose to grant the terms of the promise rather than treaing if as a K, under R-K, if only enforcement of it will grant proper remedy

Front 4

Detrimental reliance

Back 4

R-K concept... is a party worse off having relied on the promise? (have they, for example, sold their home and all their possessions then gotten nothing?)

Front 5

Reliance Requirement for promissory estoppel

Back 5

that the reliance is REASONABLE

Front 6

Reasonable Reliance for Promissory Estoppel in Codified States

Back 6

does not require that all other means of obtaining the benefit of the promise be exhausted
reliance at a detriment to self

Front 7

Implied Promise

Back 7

can serve as basis for promissory estoppel... if ones actions create a reliance, particularly toward future continued action

Front 8

Charitable Pledge or subscription

Back 8

an oral or written promise to do certain acts or to give real or personal property to a charity or for a charitable party
there must be a promise to give some property to the institution and the promise must be supported by consideration OR reliance

Front 9

R2-K charitable donations

Back 9

essentially that a mere statement to give to a charity is enough, that there would have to be no consideration or reliance for it to be binding
only Iowa has adopted this “man to his word” doctrine of §90(2)

Front 10

Difference between jurisdictions

Back 10

some require a consideration on one side, others just allow estoppel

Front 11

Ancillary restraints

Back 11

sometimes reasonablee (as opposed to non ancillary restraints being always unreasonable

1)Promise to refrain from competition is ancillary to otherwise valid transaction is unreasonable if
---Restraint is greater than is needed to protect promissee’s legitimate business
---Promissee’s need is outweight by hardship on promisor and is an injury to the public
*****go through these on an exam with non-compete clauses. The restriction has to be reasonably related to the business of a company

Front 12

Ancillary Promises examples

Back 12

Ancillary promises include
Promise by seller of business not to compete with buyer in such a way as to injure value of business sold
Promise by an employee not to compete with employer or other principal
Promise by a partner not to compete with a partnership

Front 13

Promotion and detrimental reliance

Back 13

If a person is promised a offered a promotion with benefits, then never recieves the benefits... this can be a detrimental reliance because he gave up his time and added stress because of the benefits that he would recieve

Front 14

elements of Promissory Estoppel

Back 14

Clear and Definite Promise is made

The promisor should have reasonably expected the promise to induce action or forbearance (objective standard)

The promise induced that action

Binding only if injustace can be aboided only by its enforcement

Front 15

Subcontractor/ General Contractor Relationship (Drennan Case Rule)
Most Prevalent

Back 15

reliance on an offer may in some cases serve as sufficient reason for making the promise binding UNLESS there is an expressly stated clause of revocation at any time before actual acceptance

Front 16

Alternative SubContractor/ General Contractor rules

Back 16

a. Subcontractor’s offer is one that requires acceptance by general contractor after winning contract, so can be revoked until such acceptance. GC’s option: no more business with SC
b. Subcontractor’s offer is one that invites GC’s promise after award of main contract, but is irrevocable until GC has had reasonable time to make that promise following award
i. Binds SC but not GC, promotes bid shopping (see below)
c. SC’s offer as one that invites acceptance by GC’s promise at the time it makes its own bid, instead of after the award
i. Binding on both parties, but subject to implied contract GC awarded contract
ii. Problem is that SC may have hard time proving that GC relied on SC’s offer

Front 17

Families and consideration

Back 17

i. Promises between families/charities do not require there to be actual consideration, but must prove that what was given was more than just gratuitous
1. Without proof of reliance, all you need to prove is a promise, no reliance required

Front 18

Agreement to Agree (Classical Contract Law)

Back 18

Not an enforceable contract unless the court supplies a term to make one (but rarely done)

Front 19

Postponed bargains

Back 19

Appear to have completed bargaining or reached an agreement, but may appear incomplete.

"Even though one of the parties may believe that the negotiation has been concluded, all items agreed upon, and the contract closed, there is still no contract unless he is reasonable in his belief and the other party ought to have known that he would so believe"

Front 20

What must one look at to see if a postponed bargain was meant to be binding

Back 20

2. Must look at the intent of the parties to see what they wanted to be bound by
a. “Not binding until final agreement is executed” indicates future agreement needed
b. Using “offer” and “acceptance” during negotiations indicates intent to be bound now

3. Past Behavior

Front 21

Modern Courts and RK on Agreement in principle

Back 21

i. Parties may be bound contractually when they reach agreement in principle even though contemplate either further negotiation (agreement to agree) or the execution of a formal written contract
1. Court will supply the missing terms that would be reasonable

Front 22

What to look at for parties not indending to be bound until Final Contract

Back 22

1. Contract is a type that requires writing to be enforceable under Statute of Frauds
2. The contract contemplated involves large sums of money
3. The contract has many details
4. Contract is unusual one for which standard form is not available or appropriate
5. The parties were apparently unwilling to proceed with any performance until the formal document was prepared and signed

Front 23

What to look at for intent to be bound

Back 23

1. No independent policy of law requires writing for enforceability and if it doesn’t the parties have exchanged writing in which the agreed upon terms are reflected
2. Proposed contract is relatively simple and doesn’t involve long term obligations
3. The contemplated “formal” contract is a standard form document
4. Parties have proceeded to perform in way that suggests they have believed the full agreement had been reached

Front 24

UCC intention to be bound

Back 24

terms that appear in the records of both parties
terms, to which both parties agree AND
TERMS SUPPLIED OR INCORPORATED UNDER THE UCC
(does no apply the last shot common law)
The contract is unusual and there is no standard form available or appropriate
Contract is simple and doesnt involve long term obligations