Reconsidering the Reliance Rules: The Restatement of Contracts and Promissory Estoppel in North Dakota

Abstract:     
There is now in some states a sort of synthetic common law, formed from a handful of cases or none at all supplemented by a judicial quasi-enactment of the Restatements of the Law. As it deals with "promissory estoppel," the Restatement of Contracts presents a web of related concepts and rules. This article asserts, consistently with modern American contract theory, there is but one "reliance interest" yet there are at least three different kinds of reliance: (1) reliance in the absence of consideration, (2) reliance in the absence of assent, and (3) reliance in the absence of a required writing. Just as there are dramatically different policies for each of the three presumptive rules that reliance occasionally displaces, so it might be expected that courts would have articulated dramatically different rationales to explain why reliance is "reasonable" and failure to enforce the relied-upon promise is "unjust" in any of the three different situations. This article examines every significant reliance case in a single jurisdiction and concludes the courts in that state have tended to assume rather than decide the doctrine is applicable. Moreover, they have neither treated the three kinds of reliance differently nor articulated why, exactly, it is sensible to enforce some relied-upon promises because of reliance, yet contrary to other law. This article draws no explicit normative conclusion other than the obvious: the law might be more predictable if courts would explain their rationale. In passing, this article observes that North Dakota has a comprehensive civil code of substantive law providing that promises constitute binding contracts if accompanied by "consent" and sufficient "cause" or consideration. Accordingly, this article suggests promissory estoppel is not only unnecessary as a practical matter but may be impermissible as a matter of law in North Dakota (and in California, Montana and other such code states).

Number of Pages in PDF File: 133

Keywords: Promissory estoppel, Reliance interest, Restatement Contracts, Civil Code

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