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 Indiana, 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 Indiana, certain elements must be established: (1) a promise by the promisor, (2) the promise must induce action or forbearance of action by the promisee, (3) the promisee must justifiably rely on the promise, and (4) the reliance by the promisee leads to a detriment which can only be avoided by the enforcement of the promise. Indiana courts will consider these factors and may enforce the promise to prevent injustice, even if the original agreement did not meet all the formal requirements of a contract. It is important to note that detrimental reliance is not a separate cause of action in tort, but rather an equitable remedy in contract law.