Response or Comment
University of Chicago Press
When, in the absence of traditional contract formalities, a promise is enforced because the promisee has acted in reliance upon it, both courts and commentators have disagreed over the proper measure of damages. Early in the debate, two positions could be discerned. Advocates of the one favored enforcing the promise according to its terms and awarding the promisee full contractual damages.This measure of recovery has come to be called the expectation interest and is an attempt to put the promisee in the same position as he would have been had the promise been fulfilled. Advocates of the other position would have limited the promisee to recovery of those tangible expenditures made in reliance on the promise. This measure of recovery has become known as the reliance interest. It attempts to put the promisee in the same position he would have been in had the promise and the subsequent reliance never taken place. More recently, perhaps in recognition of the fact that action-in-reliance might constitute the basis for promissory liability in increasingly disparate contexts, some commentators have advocated the ad hoc administration of remedies in an attempt to work "substantial justice" in any particular situation. It may indeed be impossible to formulate a comprehensive rule of damages for all circumstances in which action-in-reliance, or promissory estoppel, is the basis of recovery. Nevertheless, it is submitted that within the wide range of contexts in which promissory estoppel may operate, there exist reasonably discrete subgroups with respect to which one may make meaningful generalizations regarding the proper measure of damages.
Theodore S. Sims,
Once More into the Breach: Promissory Estoppel and Traditional Damage Doctrine
University of Chicago Law Review
Available at: https://scholarship.law.bu.edu/faculty_scholarship/1665