Case law accurately delineates the four evolutionary stages of promissory estoppel. As an overview, promissory estoppel has evolved in American case law in four developmental stages: (1) Estoppel Phase, consisting initially of “defensive equitable estoppel” to estop contract defenses based on statutes of limitations and the statute of frauds. In the second part of this first phase, courts have extended “estoppel” based on representations of facts to “promissory” representations and enforced the promissory basis of the representation, thereby creating an affirmative theory of relief. Thus, this first phase of promissory estoppel consists of defensive equitable estoppel and offensive equitable estoppel. (2) Contract Phase, in which promissory estoppel has developed as a consideration substitute which courts have used to validate promises and award traditional contract expectation damages. (3) Tort Phase, in which courts have recognized a promisee's right to rely and a promisor's duty to prevent (or not cause) reasonably foreseeable, detrimental reliance. During this third phase, courts have applied promissory estoppel offensively (independent of contract) to award reliance damages. (4) Equity Phase, in which courts have assimilated the first three phases (estoppel, contract, and tort) and have applied promissory estoppel equitably to rectify wrongs by awarding relief based on the discrete facts of each case. The remedy is discretionary with no mechanical bright line rule; it is equitably molded for each case and may include the full range of remedies (expectation, reliance, restitution, specific performance and exemplary). Part II of this Article considers these four evolutionary phases.
Eric Mills Holmes, The Four Phases of Promissory Estoppel, 20 SEATTLE U. L. REV. 45 (1996).