MBE Rules · Contracts
Estoppel Exception to Statute of Frauds
Promissory estoppel and the SoF
The rule
Reliance can defeat the writing requirement: promissory estoppel enforces oral promises where injustice is otherwise unavoidable, and equitable estoppel bars asserting the statute after representations that a writing exists or is unnecessary.
In plain English
The Estoppel Exception to the Statute of Frauds allows a party to enforce an oral promise if they relied on that promise to their detriment, making it unfair to allow the other party to back out. This principle is rooted in preventing injustice when one party has acted based on the belief that a contract exists, even if it wasn't put in writing.
Worked example
Alice tells Bob that she will sell him her car for $5,000, and Bob, relying on this promise, sells his own car and spends the money on a new job that requires a vehicle. When Alice later refuses to sell the car, Bob can argue that he relied on her promise and should be able to enforce the agreement despite the lack of a written contract. The court finds in favor of Bob, enforcing the oral promise.
Memory hook
Reliance on a promise can turn an oral agreement into a binding contract.
The trap
Exams often present scenarios where students must distinguish between mere reliance and detrimental reliance, leading to confusion about when estoppel applies. Students might overlook the necessity of showing that injustice would result without enforcement.
How examiners test it
Questions typically involve fact patterns where one party relies on an oral promise and suffers a loss, prompting candidates to analyze whether estoppel applies to enforce that promise despite the Statute of Frauds.
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