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 Delaware, the legal concept of detrimental reliance is recognized and is often referred to as promissory estoppel. This doctrine comes into play when one party to a contract makes a promise, the other party reasonably relies on that promise, and as a result, suffers a loss when the promising party fails to fulfill their obligation. Detrimental reliance can indeed serve as a substitute for consideration, which is a necessary element for contract formation, and can make an otherwise unenforceable agreement enforceable. The principle is rooted in equity, aiming to prevent injustice by prohibiting the party who made the promise from arguing that their promise should not be upheld. It is important to note that detrimental reliance is not considered a separate cause of action in tort; rather, it is an equitable remedy that applies in the context of contractual relationships. Delaware courts will consider factors such as the promise made, the reliance by the other party, and the resulting harm from the failure to perform the promise when determining the applicability of promissory estoppel.