Consideration, forbearance, moral obligation, and promissory estoppel: Hamer, Kirksey, Webb, Red Owl, and Drennan

Black-letter propositions

1. 01

   Consideration may consist of some right, interest, profit, or benefit accruing to one party, or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other, and a waiver of a legal right at the request of the other party is sufficient.

2. 02

   Courts do not ask whether the thing given as consideration actually benefits the promisee or anyone else, and it is enough that something is promised, done, forborne, or suffered in exchange for the promise.

3. 03

   A promisee who gave up a legal right, such as refraining from drinking liquor, using tobacco, swearing, and playing cards for money until age 21 in exchange for a promised $5,000, supplied consideration even though the abstention benefited him and not the promisor.

4. 04

   A promise to give land or a house that is a mere gratuity is not supported by consideration, even if the promisee incurred inconvenience or expense in moving in reliance on it, in the view of the majority in Kirksey v. Kirksey.

5. 05

   A promise to pay for a past service can be enforceable when the promisor received a material benefit, such as being saved from death or grievous bodily harm, and the promisor afterward promised to pay, though a moral obligation without a material benefit is not enough.

6. 06

   Promissory estoppel makes a promise binding when the promisor should reasonably expect it to induce action or forbearance of a definite and substantial character, the promise does induce that action or forbearance, and injustice can be avoided only by enforcement of the promise.

7. 07

   Promissory estoppel does not require a promise so comprehensive that it would ripen into a contract if accepted, and an action on it is not the equivalent of a breach-of-contract action, so a court may fashion relief to fit the reliance.

8. 08

   A person who was not the promisee may recover under promissory estoppel if the promisor actually foresaw, or had reason to foresee, that person's action in reliance on the promise.

9. 09

   A general contractor who reasonably relies on a subcontractor's bid in computing its own bid may enforce the subcontractor's bid, because reliance makes the offer irrevocable.

10. 10

    Reliance that is only preparation or expected profit, rather than a definite and substantial action or forbearance induced by the promise, does not by itself support promissory estoppel.

Use this attack sequence under time

Common wrong turns

• A promise that is a mere gratuity is not a contract even when the promisee incurred some inconvenience.
• The adequacy of consideration and the benefit to the promisor are not examined, so giving up a legal right suffices.
• Promissory estoppel needs definite and substantial reliance and a showing that injustice can be avoided only by enforcement.
• A moral obligation alone is not consideration, but a promise to pay for a material benefit already received may be enforceable.

Worked example

An uncle promises his nephew $5,000 if the nephew refrains from drinking, smoking, and gambling until age 21. The nephew complies, and the uncle's estate refuses to pay, saying the uncle received no benefit.

Practice this topic

Consideration and forbearance

Hamer v. Sidway held that the nephew's promise to refrain from drinking liquor, using tobacco, swearing, and playing cards or billiards for money until he was 21 was consideration for the uncle's promise to pay $5,000, defining consideration as some right, interest, profit, or benefit accruing to one party or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other, and rejecting the argument that the promisor must be benefited.

Kirksey v. Kirksey concerned a promise to give a widow a house and land if she moved sixty miles, and the majority held that the promise was a mere gratuity on which an action would not lie, though one justice thought her loss and inconvenience in moving was sufficient consideration.

Past benefit

Webb v. McGowin held that a promise to pay a man who saved the promisor from death or grievous bodily harm was valid and enforceable, because the promisor received a material benefit and expressly agreed to pay, the court distinguishing a supposed moral obligation based on a refined sense of ethical duty without material benefit.

Promissory estoppel

Hoffman v. Red Owl Stores adopted the doctrine of section 90 of the Restatement of Contracts and stated three conditions for recovery: the promise should reasonably be expected to induce action or forbearance of a definite and substantial character, the promise did induce it, and injustice can be avoided only by enforcement of the promise. The court said that the promise need not be so comprehensive as to ripen into a contract if accepted and that an action on promissory estoppel is not the equivalent of a breach-of-contract action, and it allowed recovery of reliance damages, including for a third person whose reliance the promisor foresaw.

Drennan v. Star Paving Co. held that a general contractor who relied on a subcontractor's bid in computing its own bid could enforce the bid, applying section 90 to make the subcontractor's offer irrevocable because of the contractor's reasonable and detrimental reliance.

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