Promissory estoppel

Promissory estoppel took shape in the nineteenth century to smooth out the rigidity of the doctrine of consideration: it is possible to suggest that promissory estoppel provides a valuable investment protection mechanism in so far as it bars the promisor from opportunistic withdrawal of his undertaking when it can be expected that the promisor’s behaviour has induced the justified reliance of the promisee (so that ignoring such reliance would be contrary to justice). Nevertheless, it simultaneously poses the problem of the adequacy of such a protection, especially where there is a margin for trading ex-post which would render the imposition of liability unnecessary. Therefore, we will see that the focus shifts from the reasonableness of the conduct during the negotiations and moves in the direction of the obligation to act in good faith. This being the original inspiration, the theory has seen further developments in North America, which created an exception and became, to a greater extent, an alternative principle to the traditional theory of consideration based on the bargaining principle (which requires that there be some type of exchange bringing value, monetary or otherwise, to both parties). Therefore, although the traditional version of promissory estoppel relaxes the rigor of this approach emphasizing the element of induced reliance, the new course marks a sharp break from the traditional approach. In a broader view, the idea is that the unilateral promise is intended precisely to reassure the beneficiary about the seriousness of the undertaking and, consequently, to induce him to act on another’s commitment. Thus, the focus shifts from the reliance of the recipient to the willingness of the promisor to assume the commitment. As a result, promissory estoppel ceases to appear as an exception and becomes, to a greater extent, an alternative principle to the traditional theory. From the comparative scholar’s perspective this picture is particularly intriguing and filled with fascinating suggestions. The counter-intuitive possibility of identifying the unilateral promise as a bargaining configuration (which revolves around the idea that the promisor wants to stress the seriousness of the commitment) or as an essential requirement of pre-contractual obligation (where it is closely linked to the desire to protect the expectation created in the promisee) requires some crucial theoretical articulations to be reconsidered. The following notes are the first steps on the path towards uncovering and examining this complex conceptual chain.