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 Oregon, 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 on to their detriment. For promissory estoppel to be invoked in Oregon, the promise must be one that the promisor should reasonably expect to induce action or forbearance on the part of the promisee, the promisee must indeed take action or refrain from it, and injustice can only be avoided by enforcement of the promise. Detrimental reliance ensures that a party who has made a promise is held accountable when the other party has relied on that promise to their harm. It is an equitable principle aimed at preventing injustice, rather than a separate cause of action in tort law. Oregon courts will consider the fairness of the situation and may enforce the promise to prevent the promisor from arguing that the contract is unenforceable due to lack of consideration.