Pop’s Cones, Inc. v. Resorts Intern. Hotel, Inc. – Case Brief
Pop’s Cones, Inc. v. Resorts Intern. Hotel, Inc., 704 A.2d 1321, 307 N.J. Super. 461 (N.J. Super. A.D. 1998).
Facts: Pop’s Cones (P) negotiated to lease space for a frozen yogurt shop in a casino hotel owned by Resorts International Hotel (D). Resorts International gave assurances that an agreement had been reached, and Pop’s Cones terminated its lease in another location and placed its equipment in temporary storage in reliance. The defendant later withdrew its offer. Pop’s Cones could not return to its former location and was unable to resume operation in a new location for one year.
Pop’s Cones sued for damages arising from detrimental reliance on promises made by Resorts International during negotiations for the lease. The lower court granted the defendant’s motion for summary judgment and the plaintiff appealed.
Issue: Under what circumstances is a promise binding in the absence of consideration?
Holding and Rule: A promise which the promissor should reasonably expect to induce action or forbearance on the part of the promisee or a third party, and which does induce such action or forbearance, is binding if injustice can be avoided only be enforcement of the promise.
The court followed a developing trend in the law by relaxing the strict requirement that there be a “clear and definite promise” in order to establish a prima facie case of promissory estoppel. The court held that whether Pop’s Cones reliance was reasonable was a question of fact to be determined by the finder of fact. The court held that plaintiff’s suit for reliance damages should not have been dismissed.
Disposition: Reversed and Remanded.
Notes: This case follows the more flexible standard under the Restatement (2d) of Contracts 90.
See Anglia Television Ltd. v. Reed for a contract law case brief in which the plaintiff was awarded the remedy of reliance damages in a claim for wasted expenditure.