Detrimental reliance, also called promissory estoppel, is a legal term that is used to make one party perform their obligations under a contract. When a party makes a detrimental reliance claim, they must show that their reliance was reasonable.
This evaluation is done on a case-by-case basis, taking all of the surrounding facts into consideration. Detrimental means that one party suffered some form of harm, often financial.
In these cases, the remedy will commonly involve an award of monetary damages, or money, that compensates the party who relied on a promise and, as a result, suffered economic harm. For more information on detrimental reliance and to find out whether a party may have a claim, they should schedule a lawyer consultation.
What Are Some Examples of Detrimental Reliance Claims?
There are many different areas of law in which detrimental reliance claims may arise, such as employment law, contract law, and child support law.
In employment law, the court may enforce an employer’s promise to pay a worker their bonus, even if it is not proven that a contract existed, under the theory of detrimental reliance. However, this theory is only used when the court recognizes the possibility of an injustice.
When a party wants to use detrimental reliance as a legal theory, they should seek guidance from a California attorney. California law recognizes this theory and has several elements of proof required to succeed.
An example, as noted above, may be that an employer promised a worker a bonus for their previous work and contributions. The worker, hoping to use that bonus money as down payment for a home, confirms with their employer that they will get it, as well as explaining why they are asking.
Suppose the employer reassures the worker that they will receive their bonus. Based on their employer’s assurance, the worker moves forward and purchases the house.
In this situation, even though a contract was not likely formed, the worker may still be able to claim detrimental reliance if their employer does not pay the bonus. If someone has any questions about whether they may be able to make a claim for detrimental reliance, they should consult with a California lawyer.
What Are Some Other Considerations?
There are also other considerations to keep in mind with detrimental reliance cases. For example, if the Statute of Frauds writing requirement applies, the parties are required to put their contract in writing.
If the parties did not satisfy the writing requirement, there may be negative results for all involved. In addition, the contract may not be enforceable in court.
In cases where the Statute of Frauds writing requirement was not met, the court will determine that a contract did not exist. When this occurs, the court cannot resolve any disputes or issues, meaning the parties involved will not be able to use the legal system to help solve their problems.
This can be bad for parties who are owed money. It may be possible to request that the court enforce an oral contract even though the contract should have been in writing. This is only allowed by courts, however, in very specific situations, such as detrimental reliance.
As noted above, detrimental reliance claims may also arise in child support cases. In most situations, someone will not be held responsible for child support of stepchildren, unless they had legally adopted them.
It is important to be aware that, even when someone does not legally adopt their stepchild, they can still be held liable under the detrimental reliance theory. If their spouse and child rely on them for support and would be in a worse position if support was stopped, they may be required to continue supporting the child.
For example, suppose a spouse was offered a job that would pay well and provide other necessary benefits, but they declined that job based on the understanding that their spouse was going to support them and their children, leaving the spouse with no way to support themselves. The other spouse would likely have to continue supporting the child, even stepchild, because the doctrine of detrimental reliance may apply.
Can Reliance on a Promise Become a Contract?
If a binding contract is not in place but one of the parties makes a promise to the other party, there may be a rare occasion where the promise is enforced under detrimental reliance in contract law. This will only be applied in a case where enforcing a promise is necessary in order to avoid an injustice from occurring.
What Do I Need To Prove for a Promise To Become a Contract in California?
As previously noted, there are elements that a party must show for a promise to become a contract in California. To prevail on a detrimental reliance claim, a party has to prove:
- A party made a promise
- Reliance on the promise was reasonable or foreseeable
- A party actually and reasonably relied on the promise
- The reliance was detrimental
- An injustice will occur if the promise is not enforced
When Is a Promise Not a Contract?
A promise and a contract are different things. Promises are made by individuals without the other person having to provide anything in return.
Suppose someone promises to give their friend a new car for their 40th birthday. If they do not do so, a breach of contract claim cannot be made because the friend did not provide anything in return.
When a contract is binding, both parties involved have legal obligations. Each of those obligations is given in exchange for the other party’s promise to fulfill their legal obligation.
When Is It Reasonable To Rely on a Promise?
It is reasonable for someone to rely on a promise when the circumstances surrounding that promise suggest that the promising party expects the other party to rely on that promise. For example, it would not be reasonable for someone to rely on their friend’s promise to give them $250,000 when they know they just filed for bankruptcy because they do not have any money.
What Constitutes Reasonable Reliance in California?
In California, even in situations where it would be reasonable to rely on someone else’s promise, that reliance also has to be reasonable. In other words, if someone promises to give their friend $100, it would not be reasonable for that friend, in reliance on the promise, to say not getting that $100 would prevent them from making a house down payment.
Do I Need a Lawyer?
If you have any questions or concerns related to detrimental reliance in California, it is essential to consult with a California contract lawyer. This can be a complicated and nuanced legal concept, which is difficult to prove in court.
Your attorney will be able to review the facts surrounding your situation, determine whether you may have a claim, and help you pursue that claim in court. Take advantage of LegalMatch’s no-cost attorney matching services to find a California contract lawyer in your area today who can help.
It usually only takes around 15 minutes to submit your legal question on the website and, once you do, you will start receiving responses from California member contract lawyers in as little as one business day. This means that, for no charge, you can quickly get started on the resolution you desire.
