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Hoffman v. Red Owl Stores
Facts: Hoffman sold his business, put down money on a lot, and moved to another city in order open a Red Owl Store because a Red Owl Store employee, Lukowitz, told him Hoffman’s $18,000 was sufficient to open and start a Red Owl Store. Lukowitz told Hoffman, “Everything is ready to go. Get your money together and we are set,” after Hoffman said he only had $18,000. Eventually, Red Owl required $34,000, and Hoffman sued Red Owl for the losses for selling his business under market figures, the amount he put towards the lot, moving expenses, and rent.
Issue: Under promissory estoppel, in order to avoid injustice after detrimental reliance, must a party prove a valid offer?
Holding: No, under promissory estoppel, in order to avoid injustice after detrimental reliance, a party does not need to prove a valid offer because promissory estoppel actions are not contract actions.
Analysis: While Lukowitz did not bargain for definite terms, he caused an injustice by leading Hoffman to detrimentally rely on his promise to get a Red Owl Store up and running for $18,000 when he used words like, “Everything is ready to go. Get your money together and we are set,” after Hoffman told him he only had $18,000. Therefore, under the theory of promissory estoppel, Red Owl must pay damages that are necessary to prevent injustice.
