Estoppel ae definition the basic purpose of this

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Chapter 9 / Exercise 125
Business English
Guffey/Seefer
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estoppel : ( A&E definition: The basic purpose of this doctrine is to preclude a person from asserting a right when, by deliberation words or conduct, she has misled the other party into justifiable belief that the right does not exist or would not be asserted.) o Other definitions: 1. A legally imposed bar resulting from one’s own conduct and precluding any denial or assertion regarding a fact. 2. A doctrine that prevents a person from adopting an inconsistent position, attitude, or action if it will result in injury to another. 3. An affirmative defense alleging good faith reliance on a misleading representation and an injury or detrimental change of position resulting from that reliance . Promissory Estoppel : The principle that a promise made without consideration becomes binding if (1) the promisor intends, or should reasonably expect, the promise to induce reliance , (2) a party actually relies on the promise , and (3) non-enforcement of the promise will cause detrimental injury or injustice . Common circumstances, other than lack of consideration, where you might want to make a PE argument : o Noncompliance with a legal formality such as the statute of frauds. PE may permit the enforcement of an informal promise when fairness demands the promisor should not be able to escape liability. o PE can be used to hold a party to a promise made during negotiations for an abortive contract. BE CAREFUL, statements of intent made during negotiations are generally not treated as promises. However, a precontractual statement may reasonably be intended as a binding commitment, justifying reliance and warranting liability if not honored. (Example: a bid relied on to one party’s detriment). o Can also afford reliance in cases where a contract fails because of a defect or omission in the agreement. (Ex: K fails for vagueness, K has escape clause but enough commitment to justify reliance.) Requirements of estoppel : o A made promise – Words and conduct must be interpreted in all the relevant circumstances to determine if the alleged promisor manifested an intent to commit to a particular course of action. MANIFESTED, rather than actual intent is determinative. Judged by an objective standard. 10 2
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Chapter 9 / Exercise 125
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103 o Promisor should reasonably have expected the promise to induce action or forbearance by the promise. Again, objective standard used. o Promisee actually relies on the promise – Courts require that the promisee be justifiable/reasonable in doing so. o Enforcement of the promise must be necessary to avoid injustice. Promisee must have suffered some specific and measurable loss. Summary: Elements of Promissory Estoppel : (1) some kind of voluntary conduct (actions or words), (2) intention to induce reliance, (3) reliance must be reasonably foreseeable, (4) detrimental reliance. + The Development of Promissory Estoppel as a Substitute for Consideration 3. Family Provisions 1) Ricketts v. Scothorn (1898) [PE is substitute for consideration] : Grandfather walks into

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