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 New York, the legal concept of detrimental reliance is recognized and is often referred to as promissory estoppel. Under this doctrine, if one party makes a promise that the other party relies upon to their detriment, the promisor may be prevented from arguing that there was no enforceable contract. This principle is particularly relevant when there is a lack of consideration, which is typically required to form a binding contract. Detrimental reliance can make an otherwise unenforceable promise enforceable if the reliance was reasonable, the promisee significantly changed their position based on the promise, and injustice can only be avoided by enforcing the promise. New York courts have applied this doctrine in various cases to ensure fairness and prevent injustice, aligning with the equitable nature of the concept. However, it is important to note that detrimental reliance is not a separate cause of action in tort; it is a principle applied within the context of contract disputes.