Hayes v. Plantations Steel Co. – Case Brief
Hayes v. Plantations Steel Co., 438 A.2d 1091, 1094 (R.I. 1982).
Facts: Hayes (P) worked for Plantations Steel Co. (D) from 1947 until 1972. After announcing his retirement, Hayes discussed a pension plan with an officer and stockholder of Plantations Steel one week before his retirement date. The pension was based solely on the promise by an officer of the corporation that Hayes would be taken care of and no formal contract was executed.
The defendant ceased paying the pension after three years and Hayes filed a complaint for breach of contract. At trial the judge entered judgment for the plaintiff and ruled that he was entitled to receive the payments. Plantations Steel appealed.
Issue: Must a promise induce reasonable reliance by the promisee in order for promissory estoppel to apply?
Holding and Rule: Yes. A promise must induce reasonable reliance upon it in order for promissory estoppel to apply. The defendant’s promise was given as a token of appreciation and without consideration from the plaintiff. The promise did not induce reliance by Hayes because he had decided to retire from his employment before any promise that he would receive a pension was made. The promise did not induce his action or forbearance and Plantations Steel’s promise did not shape his thinking.
Notes: At trial the court analyzed the consideration and contract issues before it ever began to consider whether promissory estoppel applied.
See Fiege v. Boehm for a law school contracts case brief in which it was held that forbearance from asserting a legal claim can constitute valid consideration.