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 Iowa, the legal concept of detrimental reliance, also known as promissory estoppel, is recognized and can be used to enforce a contract that may otherwise lack consideration and be unenforceable. This doctrine applies when one party makes a promise that the other party relies upon to their detriment. For promissory estoppel to be invoked in Iowa, certain elements must be established: the promisor made a promise that was expected to induce action or forbearance, the promisee reasonably relied on the promise and took action or refrained from taking action, and injustice can only be avoided by enforcing the promise. Detrimental reliance ensures that a party who has acted based on the promise of another cannot be unfairly harmed when the promisor fails to fulfill their promise. While detrimental reliance is rooted in principles of fairness and equity, it is not considered a separate tort but rather a principle that can make an otherwise unenforceable agreement enforceable under contract law.