Michigan

Can A Promise Be Enforced Even If It's Not a Formal Contract?

In the hustle and bustle of business, sometimes promises are made that don't necessarily rise to the level of an enforceable contract. Sometimes those broken promises can cost a business or entrepreneur plenty. Many businesses and entrepreneurs assume that if a promise or agreement isn't in writing, it can't be enforced. While that is true in many cases, sometimes those promises can be enforced.

For example, in certain cases, Michigan courts will employ the legal doctrine of "promissory estoppel" to enforce promises that don't rise to the level of a contract. The relief granted under this doctrine is usually limited in scope and applies only to someone who has reasonably and foreseeably relied on the promise to his or her detriment.

In order to recover under the doctrine of promissory estoppel, four requirements must be met:

1. Someone must make a promise.

2. Someone else must genuinely and justifiably rely on the promise.

3. The actions that are taken in reliance on the promise must be reasonably foreseeable to the person who makes the promise.

4. Injustice will occur if the promise isn't enforced.

If the court determines that these four requirements have been met, it can require the person who made the promise to pay certain damages to the person who relied on the promise.

Convincing a court to enforce a non-contractual promise can be tricky business. Any Michigan business or entrepreneur who believes they may have a claim based on a promise should consult with a knowledgeable Michigan business litigation lawyer to review their rights.

Full post as published by Michigan Business Lawyer Blog on July 23, 2008 (boomark / email).