When parties to a contract make promises to perform their obligations, and one party reasonably relies on the other party’s promise—but the party making the promise fails to perform, causing harm or loss to the party who relied on the promise—the party who relied on the promise to perform is said to have relied to its detriment.

This legal concept is called detrimental reliance. Detrimental reliance may serve as a substitute for consideration, and make an otherwise unenforceable contract enforceable.

Thus, detrimental reliance is a legal concept based on fairness (known as equity or equitable), and is equivalent to contractual promissory estoppel (due to the other party’s reliance, the party who did not keep its promise is prohibited from challenging the enforceability of its promise).

Detrimental reliance is not a separate tort cause of action.

In Alabama, the legal concept of detrimental reliance is recognized and is often referred to as promissory estoppel. Under Alabama law, promissory estoppel can make an otherwise unenforceable contract enforceable if one party has reasonably relied on the promise of the other to their detriment. For promissory estoppel to apply, several elements must be established: (1) there must be a promise, (2) the promisor must reasonably expect the promisee to rely on the promise, (3) the promisee must indeed rely on the promise, and (4) this reliance must result in a detriment to the promisee. If these elements are met, the party who made the promise may be estopped from denying the enforceability of the contract. This doctrine is rooted in principles of fairness and equity, ensuring that parties cannot unjustly benefit from their promises at the expense of those who have relied upon them. However, detrimental reliance is not considered a separate cause of action in tort; it is a principle applied within the context of contract disputes.