Hoffman
owned a bakery.He hoped to
open a Red Owl franchise grocery store in Wisconsin.Relying on Red Owl's assurances,
he bought a small grocery store in order to gain experience in the grocery
business.Again, on Red Owl's
assurance, he sold the grocery store, rented a new space in preparation
for a Red Owl store, and sold his bakery.Then, Red Owl repeatedly raised the price of their
franchise until it was out of Hoffman's price range.Red Owl pulled out, Hoffman sued.
The
Trial Court found that Hoffman had acted to his detriment in reasonable
reliance on Red Owl's promises, and awarded him reliance damages.Red Owl appealed. (promissory estoppel)
The
Trial Court asked the jury to render a special verdict, which means that in addition to asking who
wins and loses, the jury is asked to answer a series of specific
questions.These help the
jury focus the damages, and can be useful for the Appellate Court.
These
are only used for civil cases.
The
Trial Court found that there was never a contract between the parties.
Red
Owl never made an offer.There were not enough details to
be considered an offer.
The
lack of a contract doesn't matter for promissory estoppel.
The
Appellate Court upheld everything except for the damages for the sale of
the small grocery store.Red
Owl appealed again.
The
Wisconsin Supreme Court affirmed.
The
Court found that there was reliance
and that the promise must be enforced in order to prevent injustice.
The
Court also found all the damages reasonable except for the damages
related to selling the small grocery store.
Insofar
as it's necessary to prevent injustice, a promisor will be held to their
promise if they reasonably expected that promise to induce reliance on
the part of the promisee and they actually did so.
This
case led to Wisconsin's adoption of the Restatement of Contracts § 90 rule (doctrine of promissory estoppel).
