TheTaxHeaven Dictionary - Know the meaning of tax

Promissory Estoppel

Promissory Estoppel Definition

Promissory Estoppel refers to an ethical contract backed by law. It is a kind of doctrine or principle that works when a contract is breached. Further adding, Promissory Estoppel enforced those contracts or promises that were done verbally, and there was no formal contract in place. 

Promissory Estoppel is a remedy typically only available in cases where no other remedy is available and where enforcing the promise would prevent an injustice. It means when the promisor goes back on his promise. Then, in the worst condition, the promisee would suffer a significant loss if the promise were not enforced. 

Promissory Estoppel Meaning

Ideally, the promisor must make a definite promise in its terms. But sometimes, it will not happen. Here, the role of Promissory Estoppel comes into the light. The purpose of Promissory Estoppel is to protect the promisee on account of false promises that the individual, the company, or any other valid entity in the law broke. 

In order for promissory Estoppel to apply, the following elements must be there in the case: 

Promissory Estoppel arises in contract law when one party makes a promise to another party who relies on that promise to their detriment. When the promisor fails to fulfill their promise, the promisee can use promissory Estoppel to enforce the promise, even though there may not be a traditional contract in place. 

Examples of Promissory Estoppel

Suppose one went to buy some glossary at the nearby general store where he bought some food items that were close to their expiry dates. But the store manager promised verbally to exchange the food items if the quality could have been better. One took the glossary items and went to his house. Soon, he realized that some glossary items were in their worst condition and, of course, not edible. So, he went back to the store to exchange the expiry items. But the manager breached the promise and said no to the exchange. In that case, Promissory Estoppel is used to enforce the promise as it is the only way to prevent an injustice. 


Promissory Estoppel Cases in India

Promissory Estoppel can be an essential tool in contract law, as it allows parties to rely on promises even when there is not a formal contract in place. However, it is important to note that the doctrine of promissory Estoppel has its limits and may not apply in all situations. 

Read the famous Promissory Estoppel cases in India that grabbed the attention: 

12 December, 1978- Motilal Padampat Sugar Mill Case 

13 May, 1992- Indian Aluminium Company Limited Case