Detrimental Reliance

Detrimental Reliance Detrimental Reliance occurs when someone takes action or fails to take action because of what appeared to be a promise made by another individual, without knowing if true or untrue. It is very similar to Promissory Estoppel in that the other party is "estopped" or legally prevented from denying liability, even though no formal contract was formed, because of its promise. An estoppel by representation [of fact] will arise between A and B if the following elements are made out. First, A makes a false representation of fact to B or to a group of which B was a member. [It is not necessary to demonstrate A knew that the representation was untrue.] Second, in making the representation, A intended or [in the alternatively,] knew that it was likely to be acted upon. Third, B, believing the representation, acts to its detriment in reliance on the representation. [It must have been reasonable to rely on the representation.] Fourth, A subsequently seeks to deny the truth of the representation. Fifth, no defense to the estoppel can be raised by A. (The Law of Waiver, Variation and Estoppel) Section 90 of the Restatement (Second) of the Law of Contracts reads, “Promise Reasonably Inducing Action or Forbearance: A promise which the promisor should reasonably expect to induce action or 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. So, in other words, someone (the "promisor") made a representation of fact which could reasonably expect the other party to rely upon, that is, one party made a promise and the other person (the "promisee") did in fact rely upon the representation or promise. Now, the promisee suffers a detriment or injury as a result of that reliance. The case of Condrey v. SunTrust Bank of Georgia, 431 F. 3d 191- Court of Appeals, 5th

Cited: Condrey v. SunTrust Bank of Georgia, 431 F. 3d 191- Court of Appeals, 5th Circuit 2005 Hardaway Co. v. PARSONS, BRINCKERHOFF, ETC., 479 SE 2d 727 - Ga: Supreme Court 1997 Lawnix. July 10, 2012. <http://www.lawnix.com/cases/promissory-estoppel.html>. The Law of Waiver, Variation and Estoppel, 2nd ed, Oxford: 2003, at para 9.02 USLegal.com. 2001. USLegal, Inc.July 08, 2012<http://definitions.uslegal.com/p/promissory-estoppel/ >.