Doctrine of Promissory Estoppel

Doctrine of Promissory Estoppel Latest News

The Supreme Court recently observed that the doctrine of promissory estoppel cannot be invoked to claim a benefit under a government policy which was never aimed to benefit a specific class of industrial unit. 

About Doctrine of Promissory Estoppel

• It is a legal doctrine that states that if someone reasonably relies on a promise and acts (or fails to act) in a way that causes them some harm because of that promise, the promise can be enforced. 
• Promissory estoppel prevents the promisor from arguing against the enforcement of a promise. 
• When is the doctrine applied?
  • The doctrine applies when the promisor has made a promise to the promisee.
  • The promisee must have relied on the promise and suffered a detriment due to the non-performance of the promise. 
  • The doctrine prevents the promisor or enterprise from going back on its word or promise.
  • The doctrine enables the injured party or the promisee to recover on a promise.
  • The doctrine seeks to protect the rights of a promisee or aggrieved party against the promisor.
  • Thus, Promissory estoppel requirements include a clear promise (whether oral or in writing), reliance on that promise by the promisee, a detriment suffered, and a need to avoid injustice. 
• Example:
  • A vendor makes an oral promise to the customer to replace the goods if they do not fit the customer’s size requirements. 
  • The customer purchases the clothes and takes them home.
  • However, the customer proposes to return the clothes to the vendor relying on the vendor’s oral promise. 
  • Here, the vendor is estopped from refusing the clothes returned.
• The doctrine varies from country to country. Cases of promissory estoppel can result in either reliance or expectation damages, depending on the jurisdiction and circumstances.
• In a 1981 decision in Chhaganlal Keshavalal Mehta v. Patel Narandas Haribhai, the SC lists a checklist for when the doctrine can be applied.
  • First, there must be a clear and unambiguous promise.
  • Second, the plaintiff must have acted relying reasonably on that promise.
  • Third, the plaintiff must have suffered a loss.

Source: LL

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