Part 3- Contracts, Chapter 12: Consideration, Doc 3 - Edubirdie

University:
Indiana University Bloomington
Course:
Financial and Managerial Accounting: Information for Decisions - John J. Wild
Academic year:

2024
Views:

342

Pages:

1
Author:

bratrochanter

In Skebba v. Kasch, the court analyzed whether promissory estoppel could enforce Kasch's promise to pay $250,000 if certain events occurred, even though a formal contract had not been established. Skebba had stayed with Kasch’s company based on this promise, despite having another job offer that would have provided financial security. When Kasch later sold the company but denied the agreement, Skebba sued for the promised payment. Key Legal Issues: 1. Promissory Estoppel: This doctrine applies when a promisor makes a promise that reasonably induces reliance by the promisee, who suffers harm as a result. Promissory estoppel is used to enforce promises in cases where a formal contract doesn’t exist but where denying the promise would result in injustice. 2. Damages under Promissory Estoppel: While promissory estoppel typically allows recovery of reliance damages (compensation for losses suffered due to reliance on a promise), the court also considered the possibility of enforcing Kasch’s original promise of $250,000. Court’s Decision: The court found that Kasch’s promise reasonably induced Skebba’s reliance, meeting the conditions for promissory estoppel: (1) Kasch made a clear promise, (2) Skebba relied on that promise to his detriment by forgoing a secure job, and (3) Kasch’s actions resulted in injustice to Skebba. Therefore, promissory estoppel could apply. Key Takeaway: The appellate court allowed enforcement of Kasch’s original promise of $250,000, even without a formal contract, because Skebba’s reliance on the promise was foreseeable and led to significant personal and financial detriment. This case demonstrates that promissory estoppel can serve as a powerful remedy, especially when a promise has been relied upon to the promisee's disadvantage and not enforcing it would be unjust.

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