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Definition of 'Promissory Estoppel'
The legal principle that a promise is enforceable by law when the promisor (person making the promise) makes a promise to the promisee (person being promised) who relies on it to his or her detriment. A promissory estoppel is intended to stop the promisor from denying that the statements, words or even conduct did not happen. This is a legal doctrine used in the United States and other legal systems around the world.
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Investopedia explains 'Promissory Estoppel'
Promissory estoppel allows a party to recover on a promise. It prevents, or estops, a person from arguing that his or her promise should not be upheld. The reliance on the promise must be reasonable, and the person trying to enforce the promise must rely on the promise to their detriment. In order to invoke a promissory estoppel, three elements must be present: the promisor, the promisee and a substantial detriment - an economic loss that occurs to the promisee if the promisor declines to honor the promise.
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