Restatement (Second) of Contracts · Section § 90
This section addresses the enforceability of promises that induce reliance, even in the absence of a formal contract.
Source: Restatement Restatement (Second) of Contracts § § 90
A promise which the promisor should reasonably expect to induce action or forebearance on the part of the promisee or a third person and which does induce such action or forebearance is binding if injustice can be avoided only by enforcement of the promise.
This section states that a promise can be enforced even if it isn't part of a formal contract, as long as the person making the promise expects that the other person will take action based on it. If that person relies on the promise and it would be unfair not to enforce it, then the promise may be binding.
This section is often invoked in cases of promissory estoppel, where a party relies on a promise to their detriment.
The enforceability hinges on the reasonable expectations of the promisor and the reliance of the promisee.
Illustration 1
A company promises to donate money for a community project, and the project organizers start spending money based on that promise. The company may be held to its promise if it results in unjust harm to the project organizers.
Illustration 2
A person promises to hire someone for a job, and that person quits their current job based on that promise. The promise is enforceable if not honoring it would greatly harm the individual.
Demonstrated the application of § 90 through various rulings recognizing promissory estoppel.
Held that a subcontractor's bid could be enforced under § 90 when the general contractor relied on it to submit a bid.
Section 90 is critical in contract law for protecting parties who rely on promises that don't constitute formal contracts. It prevents injustices that could arise when one party reasonably depends on the other’s word and takes actions based on that representation.