Promissory estoppel is a legal term used in contract law to refer to the legal principle that enforces a promise made by one party to another, even if there is no formal agreement. This concept is often used in cases where one party has relied on the promise made by another, and has suffered a loss as a result.
A promissory estoppel agreement is a type of legal agreement that is based on the principle of promissory estoppel. Such an agreement is used to enforce a promise made by one party to another, even if there is no formal contract between the two parties.
A promissory estoppel agreement typically contains the following elements:
1. A promise made by one party to another – This promise can be either oral or written, and can concern any type of agreement between the parties.
2. Reliance by the other party – The other party must have relied on the promise made by the first party, and must have suffered some type of loss as a result.
3. Unconscionability – The enforcement of the promise must be necessary to prevent an unconscionable result. This means that a court must determine that it would be unfair or unjust to allow the first party to back out of the promise that was made.
Promissory estoppel agreements are often used in cases where one party has made a promise to another, but has failed to honor that promise. For example, a company may promise to pay a contractor for work that was completed, but then fail to make the payment. In such cases, the contractor may be able to rely on the principle of promissory estoppel to enforce the promise that was made.
In general, a promissory estoppel agreement can be a useful tool for enforcing promises that have been made between parties, even if there is no formal contract in place. However, it is important to seek the advice of an experienced attorney before entering into any type of legal agreement, to ensure that the agreement is enforceable and legally binding.