Contracts and Sales Multistate Bar Practice Exam

What type of damages may be awarded under promissory estoppel?

1. Liquidated damages

2. Punitive damages

3. Expectation damages or reliance damages as justice requires

4. Restitution to prevent unjust enrichment

The correct answer is: Expectation damages or reliance damages as justice requires

The correct response highlights that under promissory estoppel, a court will often award either expectation damages or reliance damages, depending on what justice requires. Promissory estoppel is a legal doctrine that allows a party to recover on a promise made without a formal contract when they have relied on that promise to their detriment. The principle behind this doctrine is to prevent injustice that may arise from one party's reliance on the promise of another. When a promise is made and a party reasonably relies on it, the law aims to put the party who relied on the promise back in the position they would have been in had the promise not been made. This can manifest as either expectation damages, which are meant to fulfill the promise as if it had been a contractual obligation, or reliance damages, which cover the expenses incurred because of the reliance on the promise. The choice between these types of damages will depend on the specific details of the case and what the court finds necessary to achieve justice. Other options, such as liquidated damages, punitive damages, or restitution, do not apply in the same way under the doctrine of promissory estoppel. Liquidated damages are predetermined damages specified in a contract, and punitive damages are intended to punish a