Restatement (Second) of Contracts · Section § 139
This section addresses the enforceability of promises that lack consideration but are made in reliance by the promisee. It outlines circumstances under which a promise should still be recognized and enforced to avoid injustice.
Source: Restatement Restatement (Second) of Contracts § § 139
A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.
Section 139 allows for a promise to be enforceable even if it lacks consideration, as long as the person making the promise reasonably expects that the other party will rely on it, and such reliance leads to action or forbearance. If enforcing the promise is necessary to prevent unjust outcomes, it will be upheld.
This section addresses the doctrine of promissory estoppel.
It emphasizes reliance as a critical factor in determining enforceability of non-contractual promises.
Limitation of remedies under this rule may be applied as deemed just.
Illustration 1
A company promises an employee a promotion based on the employee’s past performance, leading the employee to quit a stable job. The courts can enforce this promise to prevent injustice.
Illustration 2
A donor promises a charitable organization a significant donation, which leads the organization to make expenditures expecting the donation. If the donor backs out, the organization may hold the donor accountable to prevent injustice.
The Court enforced the promise of a grandfather to provide support to a granddaughter who quit her job based on the expectation of receiving the promised money, establishing the reliance principle.
The court enforced a subcontractor's bid that was relied upon by a general contractor, emphasizing reliance as a basis for enforceability.
Section 139 has significant implications in contract law, as it protects parties who act based on non-enforceable promises, recognizing the importance of reliance in contractual relationships. This section is particularly beneficial when formal contracts are lacking but reliance and expectation exist.