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 Dakota, the legal concept of detrimental reliance, also known as promissory estoppel, is recognized and can affect the enforceability of a contract. When one party to a contract makes a promise that the other party relies on, and that reliance is reasonable and to their detriment, the party who made the promise may be prevented from arguing that the contract is unenforceable, even if there was no consideration. This principle is grounded in the concepts of fairness and equity. It is designed to prevent injustice that would result if the promising party could renege on their commitment after the other party has taken action based on the promise. Detrimental reliance is not considered a separate tort but is a doctrine used to enforce contractual obligations in situations where formal contract requirements may be lacking but where one party has acted to their detriment based on a reasonable belief that a promise would be fulfilled.