Notes - Hoffman v. Red Owl Stores | Kessler, Gilmore & Kronman | August 28, 2012


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by Kessler, Gilmore & Kronman



1. The promises and assurances made by the defendant in Hoffman were not "so comprehensive in scope as to meet the requirements of an offer that would ripen into a contract if accepted by the promisee." 26 Wis. 2d at 698, 133 N.W.2d at 275. But as the court pointed out, §90 does not require an offer.


Rather the conditions imposed are:


(1) Was the promise one which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee?

(2) Did the promise induce such action or forbearance?

(3) Can injustice be avoided only by enforcement of the promise?


Id. at 698, 133 N. W.2d at 275.


The Hoffman court went on to point out that "it would be a mistake to regard an action grounded on promissory estoppel as the equivalent of a breach of contract action."


2. If promissory estoppel is not an action for breach of contract, what is it? Promissory estoppel has been called "a peculiarly equitable doctrine." Henderson, Promissory Estoppel and Traditional Contract Doctrine, 78 Yale L.J. 343, 379-380 (1969). From this, the California Supreme Court, misreading Henderson and over the strong dissent of Newman, J., drew the inference that there could be no right to a jury trial in an action based on promissory estoppel. C & K Engineering Contractors v. Amber Steel Co., 23 Cal. 3d 1, 587 P.2d 1136, 151 Cal. Rptr. 323 (1978). The Hoffman court did not go so far. Of the three issues set forth above, the first two were left to the jury.


3. If promissory estoppel is not based on contract, how should the jurisdictional and government liability questions noted in connection with Heyer Products, supra p. 207, be resolved when a plaintiff bases his claim on Section 90?  Note that under both Restatements an action based on Section 90 is an action for breach of contract.  See §1.  Which statute of limitations should apply in promissory estoppel actions?  See Huhtala v. Travelers Ins. Co., 401 Mich. 118, 257 N.W.2d 640 (1977).

4. Goodman, Chrysler, and Hoffman have all been explained in terms of bad faith. Although the bad faith in Chrysler was clear, it was more subtle in Goodman and Hoffman. In the latter cases, bad faith has been found in the failure promptly to withdraw a "rash promise" and post-promise assurances about future performance. Goetz & Scott, Enforcing Promises: An Examination of the Basis of Contract, 89 Yale L.J. 1261, 1319-1320 (1890). Is the use of promissory estoppel in this context filling a gap left by the tort law of fraud and deceit? Can a connection be made between the bad faith in these three cases and the bad faith doctrine in the insurance cases described in Chapter 4, Section 3? See Holmes, Is There Life After Gilmore's Death of Contract? - Inductions from a Study of Commercial Good Faith in First-Party Insurance Contracts, 65 Cornell L. Rev. 330, 369-370 (1980).


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June 02, 2014 Notes - Hoffman v. Red Owl Stores Notes - Hoffman v. Red Owl Stores

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