A local charity solicits donations for a new community center. A wealthy donor attends a fundraising event and publicly pledges $100,000 to the charity, stating, 'I promise to give $100,000 to build the new community center.' Relying on this pledge, the charity immediately signs a contract with an architect for the center's design, incurring $10,000 in non-refundable fees. The donor later refuses to pay. Can the charity enforce the donor's promise?
- AYes, because the public nature of the pledge created a binding unilateral contract.
- BYes, under the doctrine of promissory estoppel, due to the charity's detrimental reliance.
- CNo, because charitable pledges are generally unenforceable unless in writing.
- DNo, because the donor's promise lacked consideration from the charity.
Show answer & explanationAnswer & explanation
Correct answer: B. Yes, under the doctrine of promissory estoppel, due to the charity's detrimental reliance.
Promissory estoppel allows a promise to be enforced even without traditional consideration if the promisor made a clear and unambiguous promise, the promisee reasonably and foreseeably relied on that promise, and injustice can only be avoided by enforcing the promise. The charity's reliance on the pledge by incurring architectural fees fits this doctrine.
Why the other options are wrong
- A. A unilateral contract would require the charity to perform an act as acceptance; here, it's reliance on a promise, not performance in response to an offer.
- C. Charitable pledges are often enforced via promissory estoppel, even if oral, provided the reliance element is met.
- D. While it lacked traditional consideration, promissory estoppel provides an alternative basis for enforcement.
Promissory Estoppel
A legal principle that allows a promise to be enforced even without formal consideration if the promisor made a clear promise, the promisee reasonably and foreseeably relied on it, and injustice can only be avoided by enforcing the promise.
- Acts as a substitute for consideration.
- Requires reasonable, foreseeable, and detrimental reliance by the promisee.
- Often applied in cases of charitable pledges or employment promises.
Memory trick: No 'quid pro quo' needed, if they relied and it's seeded, justice is indeed heeded.