Promissory estoppel

Promissory estoppel is a legal doctrine that courts use to force someone to keep a promise in the absence of a contract. Generally, a promise is not enforced by the courts if it is not a contract created by mutual assent. However, the court will enforce a promise when the court deems that fairness and equity require that enforcement.

An example of promissory estoppel is the construction of a building. A construction company puts together the estimates of a number of subcontractors and quotes its client a price. The client accepts, and construction begins. However, thereafter one of the subcontractors drastically raises the price above its original estimate. Because of this change, the construction company cannot profit from the building. A court would be likely to give the construction company promissory estoppel, which would allow them to pay what the subcontractor originally estimated rather than the new, higher price.

The phrase promissory estoppel originates from the idea of "stopping" a party from backing out of a "promise."