Concept of Promissory Estoppel

Posted on July 16, 2016 By

A legitimate precept, that is utilized amid court procedures, promissory estoppel has been clarified in the accompanying article. To know more, read on.

In the court of law, several legal doctrines are used to make cases less complicated and resolvable. This concept is made up of two sub concepts, namely, estoppel and promissory. The concept of estoppel indicates that any person cannot revert, deny, challenge, or contradict any fact established and accepted as truth in the court of law.

This basically implies the fact that any person cannot simply change opinion, decision, fact, testified fact, etc. This principle of estoppel which is used in almost all fields of law, thus prevents a person from contradicting any fact that has been proved to be true in the court of law, either by lawyers, or by the court itself.

There are different kinds of estoppel which are legally followed throughout the world, and are prevalent in most courts of law. Developments and incidences though, may override the established fact, and the judge or the jury can change the established fact.

The word promissory determines the fact the estoppel is granted for, or against, a promise. This implies the fact, that the said estopppel is established upon the basis of a promise. It must be noted that proving a promise, and then activating the promissory estoppel is quite difficult.

Promise, Agreement and Contract

Before we go ahead and observe the promissory estosppel definition, it is necessary to know more about promise, agreement and contract. So here goes…

  • Promise: In common law, throughout the world, a promise is an assurance to do something, or abstain from doing something, that may be of benefit to either or one parties. A promise can be written or oral, and is usually informal, plus lacks ‘consideration’. A promise, in some cases, tends to have a legal backing and recognition by court, especially if it is verifiable by any source or witness. Often, a promise is initiated by one person and consented to by another person.
  • Agreement: An agreement is a mutual understanding to execute. Just like a promise, a domestic agreement which does not have legal consideration, is not usually legally enforceable. However, an agreement with legal considerations tends to have legal backing, and can also be enforced by the court.
  • Contract: A contract is a legally enforceable agreement and has legal consequences upon breach. In such a case, the entire agreement becomes a bound contract.

Thus, the three concepts, promise, agreement and contract are correlated and, in some cases, progressing steps towards legally binding contracts. There are however subtle differences in the three. These differences are quite highlight-able as per the presence and absence of consideration and willingness.

What is Promissory Estoppel?

As mentioned above, promissory and estoppel are two terms that are seen in this phenomenon. Promissory indicates a promise, whereas estoppel indicates a preventive doctrine. The doctrine, principally, states that a promise once proved to be a fact, cannot be challenged, questioned or reverted by either parties.

It so happens that, in common life, promise of formal nature are made, for example a superior promises an employee a raise, or creditor forgives a part of debt in promise. Here, the key element of consideration is totally absent, however the promise is a legally binding in nature.

One important condition that the court looks for, before enforcing and activating the preventive estoppel, is whether the promisee had any financial interest in the promise, or had relied on the promise to take up any decision. In such cases, where there has been an existence of a certain decision taken by relying on the promise, the court can ‘activate’ the promissory estoppel. It basically means that during the proceedings, either party cannot deny the existence of a promise once proved.

This doctrine is always related to promises made in the past, however current events and new settlements, can lead to a change in scenario and estoppel may be lifted by the courts.