What Is the Meaning of Promissory Estoppel?

Considerations

• When parties contract, generally each party must give up something in order to induce the other party to make promises. The legal name for this thing given up is "consideration."
  
  

Gratuitous Promise

• If one party promises something to another, but that promise was not induced by some consideration given up by the other party, the promise is "gratuitous" and therefore not enforceable as a contract in a court of law.
  
  

Promissory Estoppel

• When one party relies on the other party's gratuitous promise to his detriment (meaning he loses money or suffers some other loss by relying on the promise), promissory estoppel may allow the injured party to either enforce the gratuitous promise, or to recover damages for his injuries.
  
  

Requirements

• There are three requirements to claim promissory estoppel. One party must make a promise upon which he could expect the other party to reasonably rely; the other party must actually rely on the promise and suffer injury by doing so; and without promissory estoppel, the injured party will suffer an injustice.