PROMISSORY ESTOPPEL: HAVE YOU RELIED ON A PROMISE TO YOUR DETRIMENT?

Promissory Estoppel was developed to protect the ability of individuals to trust promises in circumstances where trust is essential. In essence, promissory estoppel can be thought of as an “invisible handshake.” State Bank of Standish v Curry, 442 Mich 76, 85; 500 NW2d 104 (1993).

The three elements necessary to make a promissory estoppel claim are:

  1. A clear and definite promise;
  2. which the promissor [the maker of the promise] should reasonably expect to induce action or forbearance on the part of the promisee [the receiver of the promise] or a third person;
  3. which does induce such action or forbearance by the promisee; and
  4. injustice can be avoided only by enforcement of the promise.

The Restatement of Contracts Section 90 (1932).

Michigan courts have utilized the promissory estoppel doctrine to enforce promises made in several situations where either a) a written contract was not present or b) a written contract was present, but did not meet the necessary requirements to be enforceable:

  • A mortgagor’s promise to an individual to induce him to stay on the land. Faxton v Faxon, 28 Mich 159 (1873).
  • A lender’s promise of financing where there was detrimental reliance. Gore v Flagstar Bank, FSB, unpublished opinion per curiam of the Court of Appeals, decided Nov 9, 2004 (No 248919).
  • An insurance company’s promise to make payment. Ardt v Titan Ins Co, 233 Mich App 585; 593 NW2d 215 (1999).
  • Unilateral promises to make a charitable contribution. In re Estate of Timko, 51 Mich App 662; 215 NW2d 750 (1974).
  • A promise of an advance on the purchase of fixtures which was relied upon by a fixture manufacturer. Feiler v Midway Sales, Inc, 363 Mich 105; 108 NW2d 884 (1961).
  • A stock broker’s recommendation that the promisee purchase stocks and, if there were a loss in the first six months, the stock broker would hold the purchaser harmless for the loss. Young v Wallace, 327 Mich 395; 41 NW2d 904 (1950).

There is a six year statute of limitations on promissory estoppel claims. See Huhtala v Travelers Inc Co, 401 Mich 118, 257 NE2d 640 (1977). Promissory estoppel will not be enforced where the promise is inconsistent with a contract between the parties. Novak v Nationwise Mut Ins Co, 235 Mich App 675, 599 NW2d 546 (1999).  And, a remedy will only be imposed where “the facts are unquestionable and the wrong to be prevented undoubted.” Id. at 687.

 

The utilization of promissory estoppel claims in employment wrongful discharge cases has been problematic in Michigan.  Due to the employment at will doctrine, oral promises of job security must be clear and unequivocal or they will not be enforced. See Rowe v Montgomery Ward & Co, Inc, 437 Mich 627, 645; 473 NW2d 268 (1991); See also Novak, supra.  

The damages available for promissory estoppel claims include: money damages and injunctive relief.

Affirmative Defenses that can be asserted against a claim of promissory estoppel include: 1) existence of a contract (express or implied) between the parties; 2) lack of a clear and unequivocal promise; 3) lack of reasonable detrimental reliance; 4) lack of injustice that can only be avoided if the promise is enforced.

As shown above, if you have relied on a promise to your detriment and there was no contract governing this promise you should consult a qualified attorney to help you navigate the nuances of your claim.

For more information, or if you need to speak with an attorney regarding a potential lawsuit, please contact us online or call our office for a free consultation, toll free: 1-855-TISH-LAW.

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