D promises P monthly pension of $200 upon retirement, although P may retire when she pleases.
Trial court finds that there was no consideration because the pension had been given for past acts. But, trial court finds that there was consideration due to P’s reasonable reliance on promise.
Is a promise to make a gift binding if the promissee reliant on the promise?
Judgment for P Affirmed.
P relied on the gratuitous promise (gift) in formulating her decision to retire. This constitutes a reliance on D’s promise which caused her action of retirement.
P’s decision to retire resulted from D’s promise, thereby triggering promissory estoppel.
Three theories at play for gifting:
- Theory of act for promise in that the induced action or forbearance is the consideration for the promise.
- Theory of promissory estoppel wherein the induced action or forbearance works an estoppel against the promissor .
- The theory of bilateral contract: when the induced action or forbearance is commenced, a promise to complete is implied and an enforceable bilateral contract is formed, the implied promise being the consideration for the original promise.
Promissory Estoppel: “a promise which the promissor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise, even if the promise was given without consideration. Past performance is not valid consideration to support a promise.”