California First-Year Law Students' Exam (Baby Bar) — MCContractsMedium
A local charity solicits donations for a new community center. A wealthy donor pledges $100,000 to the charity, stating, 'I promise to give your organization $100,000 for the new community center.' Relying on this pledge, the charity immediately enters into contracts with architects and builders, incurring significant expenses. The donor later refuses to pay the $100,000. If the charity sues the donor, what is the most likely legal basis for enforcing the pledge?
- ABreach of a unilateral contract.
- BQuasi-contract.
- CPromissory estoppel.
- DBreach of an express contract.
Show answer & explanationAnswer & explanation
Correct answer: C. Promissory estoppel.
While a charitable pledge might lack traditional consideration, courts often enforce such pledges under the doctrine of promissory estoppel if the charity reasonably and foreseeably relied on the promise to its detriment, and injustice can only be avoided by enforcement.
Why the other options are wrong
- A. A unilateral contract requires performance as acceptance. Here, the charity's reliance isn't performance but detrimental action based on the promise.
- B. Quasi-contract (unjust enrichment) applies when there is no contract, but a benefit was conferred and it would be unfair to retain it without payment; here, the issue is a broken promise, not an uncompensated benefit.
- D. An express contract requires an offer, acceptance, and consideration. Charitable pledges often lack consideration.
Promissory Estoppel
A doctrine that enforces a promise, even without consideration, to prevent injustice when the promisor should have reasonably expected the promisee to rely on the promise, and the promisee did rely to their detriment.
- Used to enforce promises lacking traditional contract elements (e.g., consideration).
- Requires reasonable and foreseeable reliance by the promisee.
- Injustice must be avoided only by enforcement of the promise.
Memory trick: Estoppel Stops the Promisor from Breaking a Promise After Reliance.