D & G Stout, inc. v. Bacardi Imports, Inc.
United States Court of Appeals, Seventh Circuit, 1991
923 F.2d 566
By: Jody Pattison

Relevant Facts:  General liquor was distributing product in the market in 1987 when two of its suppliers bailed out.  Bacardi said they would remain with General.  It could have sold to another potential buyer then.  General decided to stay with the idea that Bacardi was going to remain.  One week later, Bacardi withdrew. General went back to the negotiating table, this time taking a sum less than originally offered.  (550,000 less)

Legal Issue(s): Can General recover the price differential from Bacardi on a theory of promissory estoppel?  Whether the plaintiff has alleged any injury which Indiana’s law of promissory estoppel redresses.

• There was no set time period.  IT was more like a statement.

Holding: YES, District court found Bacardi’s promise had been “contingent” on future events since it was subject to the conditions that General would continue to meet Bacardi’s expectations in sales and no market change would occur.  The court awarded General damages incurred in reliance on Bacardi’s promise equal to the difference between Nationals initial offer and the final sale price, which equaled 394,050.

Law or Rule(s):  A promise, which the Promisor should reasonably expect to induce action or forbearance on the part of the promissee and a third person and which does not induce such action or forbearance is binding if injustice can be avoided only by the enforcement of the promise.  The remedy for breach may be limited, as justice requires.

Court Rationale

Plaintiff’s Argument: Bacardi says that these promises were not the type upon which one may rely under LA law.