Kill the Monster: Promissory Estoppel as an Independent Cause of Action

Contract rules may be dissolving into tort-type notions of unfairness and injustice. Traditionally, promissory estoppel was viewed as a substitute for consideration in situations where promisors made promises knowing that promisees would act in reliance on them, the promisees did act on the promises, and the promisors refused to do what they promised to do, to the promisees’ detriment. The purpose of promissory estoppel was clearly one of fairness and preventing injustice by enforcing a promise not supported by consideration in very limited circumstances. In recent cases, however, courts have been approving the use of promissory estoppel as an independent cause of action to provide remedies for alleged contracts that otherwise would be unenforceable.

If contract rules are frequently displaced by ad hoc decisions about unfairness, the predictability and reliability of business transactions will diminish to the detriment of all who engage in them. This Article will review the development of the doctrine of promissory estoppel and the variations in its acceptance among the states. It will consider the classification of promissory estoppel as an action at law or in equity and the doctrine’s weakening of traditional contract rules, particularly the statute of frauds. This Article concludes that it is not in the interest of businesspeople for their contractual obligations to be governed by the “community’s shared sense of fairness” rather than their specific bargained-for exchanges of promises, as governed by classic contract rules.

The former provides no reliability or predictability, just confusion and more opportunity for litigation.