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 North Carolina, 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 that the other party relies upon, and as a result of this reliance, the latter party suffers a loss when the promise is not fulfilled. Detrimental reliance can indeed serve as a substitute for consideration, which is a necessary element for contract formation. If a party has made a promise that the other party has relied on to their detriment, the promisor may be estopped from arguing that there was no consideration, thus making an otherwise unenforceable promise enforceable. The principle is rooted in equity, aiming to prevent injustice by prohibiting the promisor from challenging the enforceability of the promise. However, it is important to note that detrimental reliance in itself is not a separate cause of action in tort; it is a principle applied within the context of contract law to enforce promises and prevent unfair outcomes.