Promissory Estoppel - Corporate MNC
9 months ago
Director promised a promotion to a mid senior level employee at the time of resignation, the employee relied on the promise and withdrew their resignation and revoked a better opportunity with more salary, after this, the director backed off, can this be a case of promissory estoppel?
A.Dear Client,
In fact, there is no provision for promissory estoppel in Indian law. Section 25 of the Indian Contract Act,1872 talks about contracts made without consideration (in other words the enforceability of promises) and Section 115 of the Indian Evidence Act deals with estoppels only. The doctrine of Promissory estoppel is considered to act as a shield as it is used as a defense in general. It is not used as a course of action. Promisor can use this defense to recover the damages suffered by him because of the reliance on the promise. Even if consideration does not exist promissory estoppel will act as a shield as this doctrine is the exception to the ‘consideration is a required’ rule. In contract, consideration is required to make the agreement a valid contract as a contract without consideration is considered void. The doctrine of promissory estoppel is part of the law in the United States and other countries, although the precise legal requirements for promissory estoppel vary not only between countries but also between different jurisdictions. Promissory estoppel is a legal doctrine that says parties may be liable for broken promises that result in financial harm. As with other legal issues, promissory estoppel cases are highly specific, meaning that it is worth consulting an attorney/solicitor before pursuing legal action against the promisor who failed to keep his promise that resulted in damages or financial loss to Promisee.
In fact, there is no provision for promissory estoppel in Indian law. Section 25 of the Indian Contract Act,1872 talks about contracts made without consideration (in other words the enforceability of promises) and Section 115 of the Indian Evidence Act deals with estoppels only. The doctrine of Promissory estoppel is considered to act as a shield as it is used as a defense in general. It is not used as a course of action. Promisor can use this defense to recover the damages suffered by him because of the reliance on the promise. Even if consideration does not exist promissory estoppel will act as a shield as this doctrine is the exception to the ‘consideration is a required’ rule. In contract, consideration is required to make the agreement a valid contract as a contract without consideration is considered void. The doctrine of promissory estoppel is part of the law in the United States and other countries, although the precise legal requirements for promissory estoppel vary not only between countries but also between different jurisdictions. Promissory estoppel is a legal doctrine that says parties may be liable for broken promises that result in financial harm. As with other legal issues, promissory estoppel cases are highly specific, meaning that it is worth consulting an attorney/solicitor before pursuing legal action against the promisor who failed to keep his promise that resulted in damages or financial loss to Promisee.
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A.Dear client,
In general, for promissory estoppel to apply, certain elements must be present. These elements typically include:
A clear and definite promise: The promise made by the director to the employee must be clear, specific, and unambiguous.
Reasonable reliance: The employee must have reasonably relied on the promise made by the director, resulting in some form of detrimental action or forbearance. This means that the employee changed their position, such as withdrawing their resignation and foregoing a better opportunity, based on the promise.
Substantial detriment: The reliance on the promise must have caused the employee to suffer a significant disadvantage or harm.
Unjust enrichment or injustice: It must be unjust or inequitable for the director to go back on their promise, considering the employee's reliance and the resulting detriment.
If all these elements are satisfied, promissory estoppel may be invoked to prevent the director from reneging on their promise.
However, the specific application of promissory estoppel can vary based on local laws and the circumstances of the case. It is essential to consult with a legal professional who can assess your situation in detail and provide accurate advice based on the laws of your jurisdiction.
In general, for promissory estoppel to apply, certain elements must be present. These elements typically include:
A clear and definite promise: The promise made by the director to the employee must be clear, specific, and unambiguous.
Reasonable reliance: The employee must have reasonably relied on the promise made by the director, resulting in some form of detrimental action or forbearance. This means that the employee changed their position, such as withdrawing their resignation and foregoing a better opportunity, based on the promise.
Substantial detriment: The reliance on the promise must have caused the employee to suffer a significant disadvantage or harm.
Unjust enrichment or injustice: It must be unjust or inequitable for the director to go back on their promise, considering the employee's reliance and the resulting detriment.
If all these elements are satisfied, promissory estoppel may be invoked to prevent the director from reneging on their promise.
However, the specific application of promissory estoppel can vary based on local laws and the circumstances of the case. It is essential to consult with a legal professional who can assess your situation in detail and provide accurate advice based on the laws of your jurisdiction.
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