Summary of Hoffman v. Red Owl Stores
Supreme Court of Wisconsin, 1965.
Facts: P was interested in obtaining a franchise of one of D’s stores. P informed D’s representative that he had $18,000 for this deal. D’s representative told P that he needed experience and he should buy a grocery store for the experience. P bought the store and within 3 months, it became profitable. The representative informed P that now he can sell the store and P reluctantly sold the store. He was again assured that $18,000 will be sufficient. Then P was told to move to a bigger city and P sold his bakery at loss of $2000 and also incurred expenses to move. The deal failed because D’s home office wanted $34,000 and P sued.
Procedure: The jury awarded P $16,735 for the sale of the store, $2000 for the sale of the bakery, $1000 for taking up the option on the Chilton lot, $140 for moving expenses and $125 for house rental in Chilton. The trial ct. affirmed the verdict but for $16735, ordered a new trial.
D’s argument: Agreement was never reached on essential factors necessary to establish a contract between P and D.
Issue: Does a promise necessary to sustain a cause of action for promissory estoppel must embrace all essential details of a proposed transaction between promisor and promise so as to be equivalent of an offer that would result in a binding contract between the parties if the promise were to accept the same?
Rationale: Section 90 does not require that in order to apply promissory estoppel, the promise must be as definite that if there was consideration, there would be a K. Section 90 only requires: 1. promise the type that promissory should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promise 2. did the promise induce such action or forbearance, 3. can injustice be avoided only by enforcement of the promise? The first 2 questions are the be determined by the jury and the jury in this case found in favor of P. The last question requires court’s discretion and the ct. finds that justice can only be avoided if P is compensated. As far as damages are concerned, “where damages are awarded in promissory estoppel instead of specifically enforcing the promisor’s promise, they should be only such as in the opinion of the court are necessary to prevent injustice." From the facts, it is evident that P bought the grocery store expecting it to be a temporary experience gaining venture and the trail court was correct in assigning a new trial for this damage amount. Affirmed.