1. George Mason School of Law
Contracts I
J. Promissory Estoppel
F.H. Buckley

2. Restatement § 90(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.

3. What we’ll look at An ideological battle?
Varieties of Promissory Estoppel
The Material Benefits Rule

4. Estoppel: An Ideological Battle?
Samuel Williston
Arthur Corbin
Oliver Wendell Holmes

5. Estoppel: An Ideological Battle?
Grant Gilmore, The Death of Contract (1974)

6. Varieties of Promissory Estoppel
Chartable Subscriptions
Family Promises
Employment Contracts
Promises to Insure

7. Charitable Subscriptions
I promise you $10,000 but renege.
Is my promise enforceable?

8. Charitable Subscriptions
I promise you $10,000 but renege. Is my promise enforceable?
On the basis of the promise, you’ve bought a car? Enforceable?

9. Restatement § 90(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.

10. Charitable Subscriptions
You and I meet and agree that we will both donate $5,000 to a third party.
I give. You don’t. Are you liable?

11. What would action or forbearance look like?
I pledge $500,000 to a college which promises to name a scholarship after me.

12. Charitable Subscriptions
Cardozo in Allegheny College p.157
Where was the promise?
Allegheny College

13. Charitable Subscriptions
Does it matter that the college was a 501(c)3?

14. Charitable Subscriptions
What about Restatement § 90(2)
A charitable subscription or a marriage settlement is binding under 90(1) without proof that the promise induced action or forbearance

15. Charitable Subscriptions
What about Restatement § 90(2)
A charitable subscription or a marriage settlement is binding under 90(1) without proof that the promise induced action or forbearance
Suppose the gift is for general purposes? Just how would one show reliance?

16. Charitable Subscriptions
Is Restatement § 90(2) inconsistent with DeLeo at 156?

17. DeLeo
The DeLeo Memorial broom closet
What did you expect for $25K?

18. Charitable Subscriptions
Is Restatement § 90(2) inconsistent with DeLeo at 156?
How might the absence of a writing be relevant
Why “no injustice”?

19. Charitable Subscriptions
Is Restatement § 90(2) inconsistent with DeLeo at 156?
Why “no injustice”?
Fiduciary relationships
Priest: penitent
Lawyer: client
Trustee: beneficiary

20. Distinguish four kinds of duties
Legal duties you should perform even if you don’t promise (e.g., pay taxes)

21. Distinguish four kinds of duties
Legal duties you should perform even if you don’t promise (e.g., pay taxes)
Things you should do because you promised to do so, and provided consideration (obligations)

22. Distinguish four kinds of duties
Legal duties you should perform even if you don’t promise (e.g., pay taxes)
Things you should do because you promised to do so, and provided consideration
Things you should do because you promised, and the promisee has relied, and 90(1) is triggered

23. Distinguish four kinds of duties
Legal duties you should perform even if you don’t promise (e.g., pay taxes)
Things you should do because you promised to do so, and provided consideration
Things you should do because you promised, and the promisee has relied, and 90(1) is triggered
Things you should do because you ought to do them and have promised to do so, notwithstanding the absence of consideration or promisee reliance

24. The fourth kind: Restatement § 90(2)
A charitable subscription or a marriage settlement is binding under 90(1) without proof that the promise induced action or forbearance

25. Charitable Subscriptions
Why do you think most courts refuse to adopt Restatement § 90(2)?

26. Charitable Subscriptions
Which rule produces more charitable giving?

27. Charitable Subscriptions
Why so few such cases?

28. Family Promises Do they deserve special consideration?
If so, which way does this cut?

29. Haase v. Cardoza p.164
Was the promise supported by consideration?

30. Haase v. Cardoza p.164 Was the promise supported by consideration?
Did Alice really stiff Rose and Loretta?

31. Haase v. Cardoza Was the promise supported by consideration?
What about reliance? A change of position?

32. Haase v. Cardoza Was the promise supported by consideration?
What about reliance? A change of position?
What about the equities?

33. Ricketts v. Scothorn p.166

34. Ricketts v. Scothorn
Was consideration given by Katie for the promise?

35. Ricketts v. Scothorn Was consideration given by Katie for the promise?
No promise on the part of the plaintiff to do or refrain from doing anything

36. Ricketts v. Scothorn
Why did the grandfather renege (even before he died)?

37. Ricketts v. Scothorn
Why did the grandfather renege (even before he died)?
“If he could sell his farm…”
Let Katie work for Funke and Ogden as a bookkeeper

38. Ricketts v. Scothorn
Was there reliance by Scothorn?

39. Ricketts v. Scothorn Was there reliance by Scothorn?
“Having intentionally influenced the plaintiff to alter her position for the worse … it would be grossly inequitable to permit … the executor … to resist payment”

40. Family promises
Why might a promisor want to incur legal liability?

41. Family promises Why might a promisor want to incur legal liability?
And why might he not want to do so?

42. Family promises
If we enforce them all, do we make promisees better off?

43. George Mason School of Law
Contracts I
J. Promissory Estoppel
F.H. Buckley

44. Varieties of Promissory Estoppel
Chartable Subscriptions
Family Promises
Employment Contracts
Promises to Insure

45. The Employment Context
Feinberg v. Pfeiffer p.173
What was the promise and why was it made?

46. The Employment Context
Feinberg v. Pfeiffer p.173
What was the promise and why was it made?
Was there consideration?

47. The Employment Context
Feinberg v. Pfeiffer p.173
What was the promise and why was it made?
Was there consideration?
Cf. Restatement § 86 on past consideration

48. Past Consideration Doctrine
Restatement 86(1)(1) A promise made in recognition of a benefit previously received by the promisor from the promisee is binding to the extent necessary to prevent injustice.
(2) A promise is not binding under Subsection (1): (a)if the promisee conferred the benefit as a gift or for other reasons the promisor has not been unjustly enriched; or (b) to the extent that its value is disproportionate to the benefit.

49. The Employment Context
Feinberg v. Pfeiffer
What was the promise and why was it made?
What was the reliance?
What would count as reliance?

50. The Employment Context
Feinberg v. Pfeiffer
What was the promise and why was it made?
What was the reliance?
How old was she in 1947?
And for how much longer did she work for Pfeiffer?

51. The Employment Context
Feinberg v. Pfeiffer
What was the promise and why was it made?
What was the reliance?
What if she had quit because she was too ill to work?

52. The Employment Context
Feinberg v. Pfeiffer
What about the equities of the case?

53. Why a different result in Hayes? P. 177

54. 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

55. 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. (So?)

56. Why a different result in Hayes?
Did the promisors intend to assume legal liability in this case? In Feinberg?

57. Promises to insure
You DID insure, didn’t you Rhett?

58. The Typical Case Spiegel at 190 Insurer: Met Life Agent: Levy
Insured: Spiegel

59. Geremia at 186
Did the lender promise to insure the car?

60. Geremia at 186 Did the lender promise to insure the car?
Where was the evidence?

61. Geremia at 185 Did the lender promise to insure the car?
Cf. Restatement 90, comment e: “applied with caution”

62. Distinguish four kinds of duties
Things you should do even if you don’t promise (e.g., pay taxes)
Things you should do because you promised to do so, and provided consideration
Things you should do because you promised, and the promisee has relied, and 90(1) is triggered
Things you should do because you ought to do them and have promised to do so, notwithstanding the absence of consideration or promisee reliance

63. The Material Benefits Rule
Webb v. McGowin p. 193
W.T. Smith Lumber Co., Chapman AL

64. The Material Benefits Rule
Webb v. McGowin
J. Greeley McGowin

65. The Material Benefits Rule
Webb v. McGowin
Treat this as a contracts case. Is there a consideration problem?

66. The Material Benefits Rule
Webb v. McGowin
Treat this as a contracts case. Is there a consideration problem?
The past consideration rule

67. The Material Benefits Rule
Webb v. McGowin
Treat this as a promissory estoppel issue. Was there promisee reliance here?

68. The Material Benefits Rule
Webb v. McGowin
So what’s the basis for a remedy?

69. The Material Benefits Rule
Webb v. McGowin
Recall Bailey v. West
Is Webb a suitable case for relief in quasi-contract?
If so, why?

70. The Material Benefits Rule
Webb v. McGowin
Describe the hypothetical bargain, if we could have frozen time before Webb diverted the block?

71. The Material Benefits Rule
Webb v. McGowin
What did the promise add?

72. Restatement § 86 Promise for Benefit Received
§ 86(1) A promise made in recognition of a benefit previously received by the promisor from the promisee is binding to the extent necessary to prevent injustice.
§ 86(2) A promise is not binding under Subsection (1)
(a) if the promisee conferred the benefit as a gift or for other reasons the promisor has not been unjustly enriched; or
(b) to the extent that its value is disproportionate to the benefit

73. The Material Benefits Rule
Webb v. McGowin
Can you distinguish it from Mills v. Wyman: p.193?

74. The Material Benefits Rule
Webb v. McGowin
Can you distinguish it from Mills v. Wyman?
What about Boothe v. Fitzpatrick (p. 199)

75. The Material Benefits Rule
Why do you think this is called the “material” benefits rule?

76. Restatement § 86 Promise for Benefit Received
§ 86(1) A promise made in recognition of a benefit previously received by the promisor from the promisee is binding to the extent necessary to prevent injustice.
(2) A promise is not binding under Subsection (1)
(a) if the promisee conferred the benefit as a gift or for other reasons the promisor has not been unjustly enriched; or
(b) to the extent that its value is disproportionate to the benefit

77. Pitching ideas: The double trust problem
Desny v. Billy Wilder at 194

78. Pitching Ideas Pitching ideas: Desny v. Wilder
Why is this a past consideration rule problem?