Promissory estoppel

From Florida Legal Wiki

The basic elements of promissory estoppel are set forth in Restatement (Second) of Contracts § 90 (1979), which states:

(1) 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.

The character of the reliance protected is explained as follows:

The promisor is affected only by reliance which he does or should foresee, and enforcement must be necessary to avoid injustice. Satisfaction of the latter requirement may depend on the reasonableness of the promisee's reliance, on its definite and substantial character in relation to the remedy sought, on the formality with which the promise is made, on the extent to which the evidentiary, cautionary, deterrent and channeling functions of form are met by the commercial setting or otherwise, and on the extent to which such other policies as the enforcement of bargains and the prevention of unjust enrichment are relevant. Id. (emphasis added).

For promissory estoppel to be applied, the evidence must be clear and convincing. Mere expectations based upon oral representations regarding future rights of parties to a contract specific in its written terms has been held to be insufficient to support a cause of action. Smith v. Piezo Technology and Professional Administrators, 427 So.2d 182 (Fla.1983); Harbour Square Development Corp. v. Miller, 517 So.2d 773 (Fla. 2d DCA 1988); Ochab v. Morrison, Inc., 517 So.2d 763 (Fla. 2d DCA 1987); Ponton v. Scarfone, 468 So.2d 1009 (Fla. 2d DCA 1985); Muller v. Stromberg-Carlson Corp., 427 So.2d 266 (Fla. 2d DCA 1983); Catania v. Eastern Airlines, Inc., 381 So.2d 265 (Fla. 3d DCA 1980).

W.R. Grace & Co. v. Geodata Services, Inc., 547 So.2d 919, 924-25 (Fla. 1989)

[edit] History

The Florida Supreme Court considered promissory estoppel in Hygema v. Markley, 187 So. 373 (1939), but rejected its application because the promise at issue in that case “was not definite but, on the contrary, was entirely indefinite as to terms and time.” Id. at 19, 187 So. at 380 (emphasis added). In South Investment Corp. v. Norton, 57 So.2d 1 (Fla.1952), the Court stated: “[O]rdinarily, a truthful statement as to the present intention of a party with regard to his future act is not the foundation upon which an estoppel may be built.” Id. at 3. In Tanenbaum v. Biscayne Osteopathic Hospital, Inc., 190 So.2d 777 (Fla.1966), the Court had before it an action for enforcement of a doctor's employment contract with a hospital in which the parties agreed orally that the doctor's employment was terminable only after five years and on ninety days' written notice. In that case, it refused to apply promissory estoppel and stated: “The question that emerges for resolution by us is whether or not we will adopt by judicial action the doctrine of promissory estoppel as a sort of counter action to the legislatively created Statute of Frauds. This we decline to do.” Id. at 779.