Quiz 12: Consideration
Promissory Estoppel: In the 1861 Group , LLC v. Wild Oats Markets , Inc., 728 F.Supp.2d. 1052, 1059 (E.D.Mo. 2010), the trial court dismissed the count for promissory estoppel because the promise to renew the lease was not sufficiently definite to support a claim for promissory estoppel. The appellate court denied the motion to dismiss the promissory estoppel because the plaintiff alleged all of the elements for promissory estoppel. A promissory estoppel is made when parties who have reasonably and substantially relied on the promise of another to their detriment they can obtain some measure of recovery to avoid injustice. The required elements for promissory estoppel are: • A clear and definite promise made. • The promisee must justifiably rely on the promise of the promisor. • That reliance is reasonable and substantial. • Justice will be served by enforcing the promise.
Preexisting Duty: • A preexisting duty occurs when consideration is not legally sufficient if one is either by law or contract under a preexisting duty to perform the action being offered as consideration for a new contract. • Here Marteen tells Tabor that due to economic reasons he will not fulfill his end of the contract unless Tabor pays more than the contracted amount. • Marteen's unforeseen difficulty does not present a defense to preexisting duty because the type of risk that Marteen assumed when he made the contract was typical for his business. • Unforeseen difficulties that are the types of risks ordinarily assumed in business do not qualify for an exemption to preexisting duty.
Promissory Estoppel Consideration: • In the 1861 Group , LLC v. Wild Oats Markets , Inc., 728 F.Supp.2d. 1052, 1059 (E.D.Mo. 2010), if the amount of damages claimed by the plaintiff had been reduced to $5,000 instead of the alleged $1,350,000 the outcome would have been the same because the elements for promissory estoppel are still present. The reduced damages amount only impacts the amount of the award that could be granted. • The defendant made a clear and definite promise that the plaintiff justifiably relied to their detriment and justice could only be served by enforcing the promise to the extent of the damages incurred. If the defendant would incur costs in excess of the $5,000 in damages to keep the promise, then promissory estoppel would not apply. • The plaintiff would still be entitled to an award of damages; however the promise would not be enforced to the detriment of the defendant if it gives the defendant an undue burden. • The court would decide an amount that would constitute and undue burden. If it cost the defendant more than twice the damages alleged by the plaintiff, then it is likely that the court will not enforce the promise.