Transcript Document
George Mason School of Law
Contracts I
Promissory Estoppel
F.H. Buckley
[email protected]
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Estoppel
Estoppel by representation of fact
Promissory estoppel
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Estoppel: An Ideological Battle?
Oliver Wendell Holmes
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Samuel Williston
Arthur Corbin
Promisory Estoppel and Reliance
A sword, not a Shield
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Ricketts v. Scothorn
I assume you were as distressed as I
was at this example of male
chauvinism…
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Ricketts v. Scothorn
Was there consideration given by
Katie for the promise?
What was the reliance?
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George Mason School of Law
Contracts I
Promissory Estoppel
F.H. Buckley
[email protected]
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Exam
Writing by laptop
Four questions, Two hours…
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What kind of reliance is
needed?
Suppose I promise you $1,000,000
and, believing me, you purchase a
new car. I renege.
Have you relied?
And would this ground a remedy?
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What kind of reliance is
needed?
Suppose I promise you $1,000,000
and, believing me, you feel
overjoyed.
Have you relied?
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Psychic Reliance
What happens when the cheque bounces tomorrow…
Happy,
Happy,
Joy, Joy
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What kind of reliance is
needed?
Suppose I promise you $1,000,000,
and have no intention of performing,
but think it would be amusing to fool
you.
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Haase v. Cardoza
Was the promise supported by
consideration?
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Haase v. Cardoza
Was the promise supported by
consideration?
What about reliance?
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Haase v. Cardoza
What about reliance?
The former restatement provided for
no relief unless the reliance was
“definite and substantial.”
What is the effect of the change?
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Haase v. Cardoza
What about reliance?
Present Restatement § 90 conditions
relief: “injustice can be avoided only
by enforcement.”
What does that mean?
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Wright v. Newman (p. 160)
How would you decide this?
What was the reliance?
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Why might a promisor want to
incur legal liability?
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Why might a promisor want to
incur legal liability?
And why might he not?
In a case such as Haase…
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Why might a promisor want to
incur legal liability?
And why might he not?
Cf. Ricketts
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Why might a promisor want to
incur legal liability?
And why might he not?
Cf. Ricketts
How would you expect promisors to
react, in an interfamily setting, if all
promises were enforceable.
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Why might a promisor want to
incur legal liability?
And why might he not?
How would you expect promisors to
react, in an interfamily setting, if all
promises were enforceable.
Fewer promises
Conditional promises
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Why might a promisor want to
incur legal liability?
And why might he not?
Might promisees sometimes be better off
if family promises are not enforceable?
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The Employment Context
Feinberg v. Pfeiffer
What was the promise and why was it
made?
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The Employment Context
Feinberg v. Pfeiffer
What was the promise and why was it
made?
What was the reliance?
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The Employment Context
Feinberg v. Pfeiffer
What was the promise and why was it
made?
What was the reliance?
What it relevant that she discovered she
had cancer?
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Why a different result in Hayes?
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Why a different result in Hayes?
Feinberg retired after the promise;
Hayes decided to retire before the
promise, and retired a week after it
was made
No formal provision, no board
resolution
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Why a different result in Hayes?
Did Hayes have a bad lawyer?
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Why a different result in Hayes?
Did the promisors intend to assume
legal liability in this case? In
Feinberg?
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Chartiable Subscriptions
Salsbury v. Northwestern Bell
Charles City College operated from 1967 to
1968. It welcomed unconventional students
who had not seen success at other colleges.
It [was] also attended by a substantial
number of young men seeking draft
deferments that would allow them to avoid
military service during the Vietnam War.
(Wikipedia)
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Chartiable Subscriptions
You and I meet and agree that we will
both donate $5,000 to a college
Consideration?
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Chartiable Subscriptions
I pledge $1,000,000 to a college
which promises to name a building
after me
Consideration? Allegheny College
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Allegheny
College
Chartiable Subscriptions
Salsbury v. Northwestern Bell
Did Salsbury rely on the subscription?
Restatement § 90(2)
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Chartiable Subscriptions
Salsbury v. Northwestern Bell
Are you satisfied with the rationale?
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Charitable Subscriptions
Can you reconcile Salsbury with
DeLeo?
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Charitable Subscriptions
Can you reconcile Salsbury with
DeLeo?
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Illness
Fiduciary relationship
Oral promise
Storage room?
Charitable Subscriptions
Should such promises automatically
be binding?
Is that what 90(2) requires?
Comment f
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Charitable Subscriptions
Why so few such cases?
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The Material Benefits Rule
Webb v. McGowin p. 191
W.T. Smith Lumber Co., Chapman AL
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The Material Benefits Rule
Webb v. McGowin
J. Greeley McGowin
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The Material Benefits Rule
Webb v. McGowin
Recall Bailey v. West
Is Webb a suitable case for relief in quasicontract?
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The Material Benefits Rule
Webb v. McGowin
Recall Bailey v. West
Is Webb a suitable case for relief in quasicontract?
What did the promise add?
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The Material Benefits Rule
Webb v. McGowin
Treat this as a contracts case. Is there a
consideration problem?
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The Material Benefits Rule
Webb v. McGowin
Treat this as a contracts case. Is there a
consideration problem?
The past consideration rule
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The Material Benefits Rule
Webb v. McGowin
Treat this as a contracts case. Is there a
consideration problem?
The past consideration rule
The material benefits rule:
Restatement § 86
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The Material Benefits Rule
Webb v. McGowin
Can you distinguish it from Mills v.
Wyman: p.192?
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The Material Benefits Rule
Webb v. McGowin
Can you distinguish it from Mills v.
Wyman?
What about Boothe v. Fitzpatrick (p. 198)
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The Material Benefits Rule
Previously binding promises
Restatement § 82
Statute of Limitations
Restatement § 83
Debt discharged in bankruptcy
Restatement § 85
Voidable duties
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The Material Benefits Rule
Pitching ideas: Desny v. Wilder p. 193
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The Material Benefits Rule
Pitching ideas: Desny v. Wilder
Was this a valid contract?
What would the implied terms be?
What if the secretary had not promised?
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Irrevocable Offers
The consideration requirement
amounts to a presumption against
irrevocable offers
Why does this make sense?
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Irrevocable Offers
The consideration requirement
amounts to a presumption against
irrevocable offers
When doesn’t it make sense?
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Irrevocable Offers
The consideration requirement
amounts to a presumption against
irrevocable offers
What purposes are served by option
contacts?: Restatement §§ 25, 37, 87(1)
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Irrevocable Offers
The consideration requirement
amounts to a presumption against
irrevocable offers
What purposes are served by option
contacts?
Hedging strategies
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Irrevocable Offers
The consideration requirement
amounts to a presumption against
irrevocable offers
What purposes are served by option
contacts?
Compensation schemes
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Irrevocable Offers
The consideration requirement
amounts to a presumption against
irrevocable offers
What purposes are served by option
contacts?
Land assembly and hold-outs
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Irrevocable Offers
The consideration requirement
amounts to a presumption against
irrevocable offers
What purposes are served by option
contacts?
Pre-contractual reliance expenditures
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Irrevocable Offers
The Brooklyn Bridge example: p. 232
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Irrevocable Offers
Legal restrictions on the right to
revoke an offer?
Revocation not effective unless communicated:
Restatement § 40
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Irrevocable Offers
Legal restrictions on the right to
revoke an offer?
Revocation not effective unless communicated:
Restatement § 40
Full performance of unilateral contract: St. Peter
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Irrevocable Offers
Legal restrictions on the right to
revoke an offer?
Revocation not effective unless communicated:
Restatement § 40
Full performance of unilateral contract: St. Peter
Acceptance through part performance: Restatement
§ 34(2)
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Irrevocable Offers
Legal restrictions on the right to
revoke an offer?
Revocation not effective unless communicated:
Restatement § 40
Full performance of unilateral contract: St. Peter
Acceptance through part performance: Restatement
§ 34(2)
Acceptance through reliance: Restatement § 34(3)
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Irrevocable Offers
Legal restrictions on the right to
revoke an offer?
Revocation not effective unless communicated:
Restatement § 40
Full performance of unilateral contract: St. Peter
Acceptance through part performance: Restatement
§ 34(2)
Acceptance through reliance: Restatement § 34(3)
Promissory Estoppel: Restatement § 90
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Irrevocable Offers
Legal restrictions on the right to
revoke an offer?
Revocation not effective unless communicated:
Restatement § 40
Full performance of unilateral contract: St. Peter
Acceptance through part performance: Restatement
§ 34(2)
Acceptance through reliance: Restatement § 34(3)
Promissory Estoppel: Restatement § 90
Collateral option contract: Restatement § 45
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Irrevocable Offers
Legal restrictions on the right to
revoke an offer?
Are all of these consistent with the idea that the
offeror’s intention to create legal relations is
determinative?
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Irrevocable Offers
Legal restrictions on the right to
revoke an offer?
Firm offers under UCC § 2-205
Is this related in any way to offeree reliance?
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Construction Contracts
Client
General Contractor
Sub-contractor
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Pavel v. Johnson p. 234
NIH
PEI (Pavel/HVAC)
Johnson (Kick)
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Pavel v. Johnson
Aug. 5: subcontractor bids
Aug. 26: PEI asks Johnson for fresh bid
breaking out Powers project
Aug. 30: PEI “accepts” Johnson’s bid
Sept. 1: Johnson notes an error and
seeks to withdraw bid
Sept. 2: PEI affirms contract
Sept. 28: NIH awards contract to PEI
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Pavel v. Johnson
Did Johnson have the right to revoke
its offer?
Contingent option contract under which
the subcontractors could not withdraw if
PEI was awarded the contract by NIH,
but could withdraw prior thereto
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Pavel v. Johnson
Did Johnson revoke its offer?
Had it the right to do so?
Contingent option contract under which
the subcontractors could not withdraw if
PEI was awarded the contract by NIH,
but could withdraw prior thereto
Was this unfair to PEI?
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Pavel v. Johnson
Did Johnson revoke its offer?
Had it the right to do so?
Was there sufficient detrimental reliance
to raise a promissory estoppel?
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Pavel v. Johnson
Did Johnson revoke its offer?
Had it the right to do so?
Was there sufficient detrimental reliance
to raise a promissory estoppel?
What was the relevance of the Aug. 26 fax
on the POWERS breakout.
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Pavel v. Johnson
Did Johnson revoke its offer?
Had it the right to do so?
Was there sufficient detrimental reliance
to raise a promissory estoppel?
Baird v. Gimbel: subcontractor withdraws
two days before contractor awarded the
contract
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Pavel v. Johnson
Did Johnson revoke its offer?
Had it the right to do so?
Was there sufficient detrimental reliance
to raise a promissory estoppel?
Where subcontractor withdraws a month
before contractor is awarded the contract,
what is the latter to do?
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Pavel v. Johnson
Did Johnson revoke its offer?
Had it the right to do so?
Was there sufficient detrimental reliance
to raise a promissory estoppel?
If the subcontractor is locked in, can the
contractor shop around?
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Pavel v. Johnson
Did Johnson revoke its offer?
Had it the right to do so?
You are the subcontractor. How do you
protect yourself in such cases?
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Good luck!
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