Promissory Estoppel Law Definition Element & Defenses – California

In California, the doctrine of Promissory estoppel is a lawsuit and argument raised when a person made a promise for which he did not receive any value or compensation, and which the promisee relied on by changing their position. (Yes, sounds like a lawyer wrote this.) This article will break it down to easy-to-understand kibbles.

Author: Brad Nakase, Attorney

Email  |  Call (888) 600-8654

Promissory Estoppel Example

If Dan made a promise to Paul, and Dan received something of value, say $100, then there may be an enforceable contract. However, if Dan made the promise and gets nothing in return for that promise, Dan’s promise is still enforceable if Paul relied on that promise.

Many lawyers and academics use “promissory estoppel” and “detrimental reliance” interchangeably. Detrimental reliance is an element of promissory estoppel.

Promissory estoppel binds a promisor when he should reasonably expect a substantial change of position, either by act or forbearance, in reliance of his promise, if justice can be avoided only by its enforcement. (Jones v. Wachovia Bank (2014) 230 Cal.App.4th 935.)

Promissory Estoppel Elements

What elements are required for the promissory? The elements of a promissory estoppel lawsuit are:

  1. a promise clear and unambiguous in its terms;
  2. reliance by the party to whom the promise is made;
  3. the reliance must be both reasonable and foreseeable; and
  4. the party asserting the estoppel must be injured by his or her reliance [aka: detrimental reliance].

Granadino v. Wells Fargo Bank, N.A. (2015), 236 Cal. App. 4th 411.

“Promissory estoppel applies whenever a promise that the promissor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and that does induce such action or forbearance would result in an injustice if the promise were not enforced. A party plaintiff’s misguided belief or guileless action in relying on a statement on which no reasonable person would rely is not justifiable reliance. If the conduct of the plaintiff in the light of his or her own intelligence and information was manifestly unreasonable, he or she will be denied a recovery. A mere hopeful expectation cannot be equated with the necessary justifiable reliance.” Granadino v. Wells Fargo Bank, N.A. (2015), 236 Cal. App. 4th 411.

Element 1:  Clear and Unambiguous Promise

The first element in a complaint for promissory estoppel is a promise that is clear and unambiguous in its terms. (Ibid.)

  • Preliminary Negotiations Are Not Enforceable Promises

Promissory estoppel cannot be invoked to enforce preliminary negotiations or discussions between the parties because no clear and unambiguous promise has been made. (Granadino v. Wells Fargo Bank, N.A. (2015) 236 Cal.App.4th 411.) (no promise was created where nothing in lender’s alleged negotiation statements assured the borrowers that the lender would refrain from completing a trustee’s sale in the future).

  • Further Negotiations

Where a full commitment between the parties is missing and the offeree is on notice that finalization of the terms will require further negotiations, there is no clear and unambiguous promise by the offeror. (Goldstein v. Comerica Bank (2015) Cal.App.Unpub. LEXIS 8702 citing (Laks v. Coast Fed. Sav. & Loan Ass’n (1976) 60 Cal.App.3d 885).)

  • Promising Retire Benefits is an Enforceable Promise

A promise originally intended as a promise to make a retirement gift became enforceable under the doctrine of promissory estoppel when the plaintiff, knowing of the offer, turned down other offers of employment because he did not want to lose the retirement allowance. (Moncada v. West Coast Quartz Corp. (2013) 221 Cal.App.4th 768.)

  • General Contractor’s Listing of Subcontractors Not an Enforceable Promise

A general contractor’s listing of subcontractors combined with a statutory restriction on the right to change listed subcontractors did not constitute a clear and unambiguous promise to accept a listed subcontractor’s bid. (Southern Cal. Acoustics Co. v. C.V. Holder, Inc. (1969)  71 Cal.2d 719.)

  • Job Application Instructions Not an Enforceable Promise

A representation in job application instructions that industry experience would be “considered” did not constitute a clear and unambiguous promise that previous longshore experience would be the determinative factor in who was registered for full-time permanent longshore work. Aguilar v. International Longshore-men’s Union Local 10, 966 F.2d 443, 446 (9th Cir. 1992).

If extrinsic evidence is needed to interpret a promise, then the promise does not satisfy the requirement of clear and unambiguous. (Garcia v. World Savings, FSB (2010) 183 Cal.App.4th 1031.)

Element 2:  Plaintiff’s actual reliance on the promise made

The promisee must have actually relied on the promise. (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150.)

  • No Reliance Where Law Student Worked Hard to Become Eligible for Honors Society

A law student’s hard work to obtain a top ten percent ranking in his law school class, performed in reliance upon the law school’s representation that such ranking would make him eligible for election to the Order of the Coif, was not action of a definite and substantial character necessary for the application of promissory estoppel. (Blatt v. University of Southern California (1970) 5 Cal.App.3d 935.)

  • Actual Reliance in Employment Relationships

In matters of employment relationships, courts may make reasonable inferences from the realities of the marketplace concerning the inducement and reliance of employees upon the benefits offered by the employer. Employees need not expressly testify that, but for the promise, they would have left the promisor’s employ or would have never worked there in the first place. (Hill v. Kaiser Aetna (1982) 130 Cal.App.3d 188.)

  • Actual Reliance Where Borrower Relies on Bank’s Promise to Modify Loan

A borrower has a promissory estoppel claim against his or her bank when he or she relies on the bank’s promise to work with the borrower to reinstate and modify the loan.  As a result, borrower did not attempt to save her home by converting from a Chapter 7 bankruptcy case to a Chapter 13. (Aceves v. U.S. Bank N.A. (2011) 192 Cal.App.4th 218.)

Element 3: Reasonable and Foreseeable Reliance

The promisee’s reliance on the promise must be both reasonable and foreseeable. (US Ecology, Inc. v. State of California (2005) 129 Cal.App.4th 887.)

  • Reasonable Reliance

Reasonable reliance binds the promisor in lieu of the consideration ordinarily required to make the offer binding. (Flintco Pacific, Inc. v. TEC Management Consultants, Inc. (2016) 1 Cal.App.5th 727.)

  • Promisor Deliberately Intends to Induce Reliance

The element of reasonable and foreseeable reliance is satisfied if the promisor, in making the promise, deliberately intended to induce the plaintiff’s reliance on such promise. (Emma Corp. v. Inglewood Unified Sch. Dist. (2004) 114 Cal.App.4th 1018.)

  • Intention to Induce Reliance in Employment Relationship

A terminated employee is entitled to economic damages for the lost income the employee suffered as a result of his leaving a secure job due to a supervisor’s false promises regarding the monthly compensation the employee would earn working for the employer. (Helmer v. Bingham Toyota Isuzu (2005) 129 Cal.App.4th 1121.)

  • No Reliance Where Promisees are Sophisticated Parties

Where the promisees were experienced business persons and the promisor made nothing more than a conditional offer with essential details missing, the promisees could not legitimately have expected that there was a binding offer and could not reasonably have relied on it. (Laks v. Coast Fed. Sav. & Loan Ass’n (1976) 60 Cal.App.3d 885.)

  • No Reliance on Promises that are not Specific and Clear

Reliance on a promise that was not specific and clear was unreasonable and unforeseeable. (Garcia v. World Savings, FSB (2010) 183 Cal.App.4th 1031.)

  • Promissory Estoppel and Third Parties

Although the Restatement (Second) of Contracts §90 does extend the doctrine of promissory estoppel to third parties, it does not extend to price quotations by manufacturers to general contractors. (C.R. Fedrick, Inc. v. Sterling-Salem Corp. (9th Cir. 1974) 507 F.2d 319.) (contractor who used price quotes obtained from supplier could not recover against equipment manufacturer under promissory estoppel doctrine).

  • Reliance in Construction Contracts

In construction contracts, if the general contractor has reason to believe that the subcontractor’s bid is erroneous, the general contractor cannot reasonably rely on the bid. (Saliba-Kringlen Corp. v. Allen Eng’g Co. (1971) 15 Cal.App.3d 95.)

ELEMENT 4: Detrimental Reliance / Plaintiff’s Injury

The party asserting the estoppel must be injured by his reliance on the promise. (Jones v. Wachovia Bank (2014) 230 Cal.App.4th 935.)

The purpose of the promissory estoppel doctrine is to make a promise by one party and the resulting detrimental reliance by another party operate as a substitute for consideration under certain circumstances. (Garcia v. World Savings, FSB (2010) 183 Cal.App.4th 1031.)


The value of the plaintiff’s detrimental reliance need not be identical with, or equated to, the value of the defendant’s promise. (Tomerlin v. Canadian Indem. Co. (1964) 61 Cal.2d 638.)

  • Injustice Can Be Avoided Only By Enforcement of the Promise

The plaintiff must show that injustice can be avoided only by enforcement of the promise. (US Ecology, Inc. v. State of California (2005) 129 Cal.App.4th 887.)

  • Oral Promises and Promissory Estoppel

An oral promise that meets the elements of promissory estoppel is enforceable if injustice can be avoided only by enforcement of the promise. (Allied Grape Growers v. Bronco Wine Co. (1988) 203 Cal.App.3d 432.)

  • Avoiding Injustice by Enforcement of the Promise

The meaning of “injustice can be avoided only by enforcement of the promise” is substantively the same thing as the requirement of unjust enrichment or unconscionable injury. (Munoz v. Kaiser Steel Corp. (1984) 156 Cal.App.3d 965.)

  • Unconscionable Injury

Unconscionable injury results from denying enforcement of an oral agreement after one party is induced by another party to seriously change position relying upon the agreement. (Allied Grape Growers v. Bronco Wine Co. (1988) 203 Cal.App.3d 432.)

Promissory Remedies: What damages are recoverable in a case of promissory estoppel?

Enforcement of the Promise

Insurer under personal liability policy was liable for judgment against its insured where insurer made commitment to be liable under insurance policy for amount of judgment. (Tomerlin v. Canadian Indem. Co. (1964) 61 Cal.2d 638.)

Compensatory Damages

A trial court’s damage award on a promissory estoppel claim must not be speculative, remote, contingent, or merely possible. (Granadino v. Wells Fargo Bank, N.A. (2015) 236 Cal.App.4th 411.)

Lost Profits

A plaintiff’s lost future wages from a former at-will employer are recoverable under a promissory estoppel theory if they are not speculative or remote and are supported by substantial evidence. (Toscano v. Greene Music (2004) 124 Cal.App.4th 685.)

No Right to Jury Trial

A jury trial is not available to plaintiffs whose cause of action is based on the equitable doctrine of promissory estoppel. (A-C Co. v. Security Pacific Nat. Bank (1985) 173 Cal.App.3d 462.)

Promissory Estoppel Statute of Limitations California

The statute of limitation for promissory estoppel in California based an oral promiseis two years. Civ. Proc. Code § 339(1).

The statute of limitation for promissory estoppel in California based an written document is four years.. Civ. Proc. Code § 337(1).

If delay in commencing an action is induced by the promisor’s conduct, the promisor is estopped from asserting the defense of the statute of limitations. The plaintiff has a reasonable time in which to bring his action after the estoppel has expired. (Doe v. Marten (2020) 49 Cal.App.5th 1022.)

AFFIRMATIVE DEFENSES

Plaintiff’s Performance Was Bargained-For

Promissory Estoppel does not apply if the promisee gave actual consideration and, therefore, a cause of action for promissory estoppel is inconsistent with a cause of action for breach of contract based on the same facts.

No Promissory Estoppel Where Employee Bargained to Work for Annual Salary Raises

Promissory estoppel doctrine did not apply when employee relied on promise of annual merit step increases in salary in accepting employment, continuing in that job and refraining from accepting a job elsewhere. (Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240.)

No Promissory Estoppel Where Subcontractor Bargained to Continue to Work for Extra Compensation

Subcontractor who continued to excavate unexpected cemented soil in response to general contractor’s promise that he would be compensated for the extra work gave bargained-for performance. (Healy v. Brewster (1963) 59 Cal.2d 455.)

Statute of Frauds

Promissory estoppel may act as exception to statute of frauds where promisee proves detrimental reliance and unconscionable injury. (Jones v. Wachovia Bank (2014) 230 Cal.App.4th 935.)

Pleading Requirement

The plaintiff must allege Breach of Promise. Assuming a clear and unambiguous promise is made, the promisee must then plead a breach of that promise. A promise of eligibility is will not create a promise.

Example re Pleading

A law school did not breach its promise to a law student when they promised him he would be eligible for membership in an honors society if he ranked in the top ten percent of his class. The election committee considered him for membership but did not elect him into the society but this did not breach a promise.

“No justiciable issue was pleaded in an attorney’s action for injunctive and declaratory relief seeking to compel his admission to membership in a national honorary legal society, where, despite his allegation that non-election, for failure to meet his schools’s law review requirements, would adversely affect his professional and economic interest, membership in the society was not a prerequisite to the practice of law, indicated no qualification for any specialized field of practice, had no direct bearing on the number or type of clients he might have or on the income he would make, and had no effect on his basic right to earn a living, and where his allegations of arbitrary or discriminatory action on the part of the election committee were insufficient to state a cause of action.” Blatt v. University of So. California, 5 Cal. App. 3d 935

Please tell us your story:

0 + 4 = ?

See all blogs: Business | Corporate | Employment

What is profit formula and how to calculate profit formula?

A business profit is revenue minus expenses. The profit formula in accounting calculates the net gains or losses incurred by the business for a period by subtracting the total expenses from the total income: Total Income – Total Expenses - Profit

What is invoice reconciliation?

Invoice reconciliation is the process of matching bank statements to incoming and outgoing invoices. The purpose of invoice reconciliation is to confirm that the data entry is correctly matched with every invoice.

What Makes a Verbal Contract Valid

A verbal contract is valid when contractual elements are satisfied, such as evidence of an offer, acceptance of the offer, and consideration which is an exchange of value between the parties.

Marketing Transport Company

The easiest way of growing your list of clients is to schedule a meeting with businesses that do a lot of shipping and introduce your transportation company. Then, engage an internet presence to market your transportation business.

What Can You Do with a Toxic Business Partner?

A bad partnership could lead to profit loss and toxic company culture. The first way of dealing with a toxic business partner is to schedule a meeting to discuss your concerns calmly.

Disruptive Business Model

Disruptive business models are disruptive innovations that bring new business ideas or technology to existing markets. A disruptive business does not fit the profile of a standard business model. Amazon is considered as one of the world's most disruptive companies.

How to Get a Business Loan with Bad Credit

For small business owners with bad credit, the easiest place to get a business loan is with the SBA. Although not easy, entrepreneurs with bad credit can get a small business loan.

How to Get a Small Business Grant

You can get a small business grant from the Small Business Administration. Also, check your local government for small business stimulus grants.

Pros and Cons of Etsy

Etsy Pro: Your products are given a large audience, and you easily sell your merchandise. Etsy Cons: You can only sell handmade or vintage merchandise, and there are many competitors.

What is a Breach of Contract in California?

A breach of contract in California arose when a party to a contract failed to achieve a legal duty the contract created. When a party to a contract fails to fulfill the terms of a binding contract, they are liable for damages for breaching the contract.

Business Equipment Leasing Pros and Cons

One advantage of equipment leasing is that you don’t need to come up with all the cash to buy the equipment. One disadvantage of equipment leasing is higher overall costs than outright purchasing the equipment.

LLC vs DBA

The main difference between an LLC and a DBA is that an LLC is a business entity, and a DBA is a registered fictitious business name. Sole proprietors, general partnerships, and LLC can register for a DBA.

What is an LLC and how does it work

An LLC is a business entity that protects the owners with limited liability protection. An LLC also offers pass-through taxation, which means the company’s profits and losses pass through to the owner’s personal tax level.

What Is a Disregarded Entity?

A “disregarded entity” refers to an entity with one owner and not organized as an entity such as a corporation, LLC, or partnership. For federal tax purposes, the disregarded entity and the owner, who is a natural person, are not treated separate.

California Breach of Fiduciary Duty

A fiduciary is a professional person who owes a legal and ethical responsibility to another person. Examples of people with fiduciary duties are lawyers, financial advisors, corporate officers, corporate directors, etc. A breach of fiduciary duty occurs when the professional person fails to do what was legally and ethically required of them.

List of 12 Biggest Business Startup Costs

It is a good idea for every entrepreneur to consider the costs associated with starting their business. Financing is stressful, but estimating startup costs goes a long way to ensuring a business succeeds.

Is it legal to sell homemade food in California?

California is one of the only states to allow individuals to sell homemade meals, including meals that contain meat. So long as you have California required permits and licenses, it is legal to sell homemade food in California.

10 Tips on How To Start A Food Truck Business

Running a food truck business is an exciting and trendy opportunity for any entrepreneur with a passion for food. If a business owner chooses the right financing options and follows the above tips, then he or she has every chance of success.

What is a demand letter?

A demand letter is a letter that is commonly written by a lawyer on behalf of a client setting forth facts supporting a demand for money. A demand letter is usually the first step in resolving a dispute between two opposing parties.

What is working capital cycles?

In business, a Working Capital Cycle is the period that a company waits to receive payment to create available cash. A long cycle means tying up capital for a longer time without earning a return. Short cycles allow your business to free up cash faster.

What Happens When Business Partners Disagree?

Before going nuclear, when business partners disagree, the partners should talk about how to move forward. If talking fails, the partners may discuss a buy-out. However, if there is wrongdoing by one business partner, a lawsuit may be an option.

Bank Statement Business Loans

A business bank statement loan lender relies only on the company’s bank statements to qualify the borrower.

How to Prove a Verbal Contract

To prove a verbal contract is by getting witnesses to testify that the agreement was made. Also, proving a contract existed can be supported by documents such as receipts, invoices, delivery, statements, text messages, and emails.

What are business performance metrics, and why it is important?

Business performance metrics is a quantifiable measured value that shows the company’s progress and growth. Business metrics track the business progress and performance. A quantifiable measurement may include customers, revenue, and profits.

Is Sabotaging a Business Illegal?

Yes, sabotaging a business is illegal regardless of who is saboteur, e.g., business partner, competitor, family member, or customer.

See all blog: Business | Corporate | Employment

© Copyright | Nakase Law Firm (2019)