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 South Dakota, the legal concept of detrimental reliance is recognized and is often referred to as promissory estoppel. Under this doctrine, a party may be prevented from reneging on a promise if the other party has reasonably relied on that promise to their detriment. This means that even if a contract lacks consideration, which is typically required for a contract to be enforceable, the principle of detrimental reliance can substitute for consideration and make the contract enforceable. The key elements that must be present for promissory estoppel to apply include a clear and definite promise, reliance by the party to whom the promise is made, and a detriment suffered by the party asserting the estoppel due to their reliance on the promise. This doctrine is rooted in principles of fairness and aims to prevent injustice that would result from the promisor's failure to fulfill their promise. In South Dakota, as in other jurisdictions, detrimental reliance is not considered a separate tort but rather a principle that can affect the enforceability of contractual promises.