detrimental reliance


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Related to detrimental reliance: Equitable estoppel, Promissory estoppel

detrimental reliance

Taking an action or failing to take an action because of a representation made by another person that turned out to be untrue.

Example: Jake called his mortgage company to find out the remaining balance due on his home loan. The lender sent Jake a letter advising him the payoff was $28,312. The sum was small enough that Jake decided to sell his car to pay off the home loan, quit his job, and take a year off to write a novel. After he sent the money in, the mortgage company advised him that it had made a mistake and the payoff was really $48,312, so he needed to pay an additional $20,000 to satisfy the mortgage. A court may apply the theory of estoppel against the mortgage company and force it to satisfy the loan without any additional money, because Jake had detrimental reliance on the mortgage company's representations.

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Detrimental reliance is widely described in treatises and in case law as a critical and defining feature of equitable estoppel.
I wrote chidingly in 1984 that "to the extent that the judges have seen detrimental reliance as a 'foreign importation,' they have occasionally rejected it on a doctrinaire basis without fully exploring its practical utility.
the injustice were defined as the detrimental reliance suffered by the
Implicit in the forbearance and detrimental reliance arguments, although rejected on the facts, is the position that both principles offer alternative grounds for the enforcement of modified contracts, provided there is a legal right of breach and a defensive estoppel argument respectively.
157) Assuming that there was detrimental reliance, the important question would then be what the correct interpretation of the clauses contained in the lease was.
Such equitable remedies are different than damages awarded to remedy the intentional tort of common law fraud and deceit which requires all of the elements of misrepresentation, reasonable detrimental reliance, and proximate cause as well as damages.
DAWSON, GIFTS AND PROMISES: CONTINENTAL AND AMERICAN LAW COMPARED 88-90, 188-91 (1980) (discussing the failure of either French or German courts to attach independent significance to detrimental reliance as a basis for promissory enforcement).
Refraining from seeking other employment cannot amount to detrimental reliance unless the at-will employee, in relying on the promise, actually rejected employment offers.
Chapter 5 Waiver, Equitable Estoppel, and Detrimental Reliance in Insurance Contracts
the taxpayer suffered no detrimental reliance, because it had paid the GCT before a 1998 letter ruling, believing the tax was legally owed).
Gordon alternatively contends that these protections arose by reason of its detrimental reliance on Brox's offer, under principles of promissory estoppel, apart from the existence of a contract.
Not too long ago, I published a short essay, The Death of Reliance,(42) in which I reported the scholarly consensus -- including such diverse writers as Daniel Farber & John Matheson, Juliet Kostritsky, Edward Yorio & Steve Thel, Mary Becker, and Michael Kelly(43) -- that had emerged over the past fifteen years or so, that detrimental reliance was not the key to understanding the doctrine of promissory estoppel.