Also known as: reliances · promissory reliance
Written by attorneys · grounded in primary & secondary sources — see below
Dependence or trust by a person, especially when combined with action based on that dependence or trust. Such reliance may give rise to legal consequences when it induces a material change of position that another party could reasonably foresee.
Select any source to read its text and confirm it supports the definition.
Regina Robinson owned the servient parcel burdened by an easement allowing Ronald Reed access across her land. After Robinson built a permanent fence and storage shed in the easement path, Reed observed the construction for months without objection. Reed later sought to enforce the easement, but the court held it extinguished because Robinson had taken inconsistent action in reasonable reliance on Reed's apparent acquiescence.
Rhea Reynolds contracted to sell equipment to Raymond Ramos. Reynolds later stated she would not deliver, prompting Ramos to begin sourcing replacements from another supplier. Before Ramos incurred substantial costs, Reynolds retracted the statement in writing. The retraction nullified the repudiation because Ramos had not yet materially changed position in reliance on it.
Radiant Technologies assured Rhapsody Entertainment that a software update posed no safety risks. Relying on that statement, Rhapsody directed employees to install the update on production servers. The update caused a system failure that injured one employee. Radiant faced liability for the physical harm that resulted from the employee's reliance on the representation.
Royal Crest Hotels permitted Rosa Ruiz to install a permanent driveway across its land for guest access. Ruiz invested substantial sums constructing the driveway and related improvements after the hotel's manager assured her the permission would continue. When the hotel later attempted to revoke access, Ruiz established an irrevocable servitude because she had substantially changed position in reasonable reliance on the belief that the permission would not be revoked.
Reliance Insurance represented to Rachel Ramirez that Raymond Ramos was a partner in its firm. Ramirez entered a loan transaction with the firm in reliance on that representation. Ramos consented to the representation. Ramos became liable to Ramirez to the same extent as an actual partner because she had entered the transaction in reliance upon the representation.
Ronald Reed was named trustee of a family trust after representing to the settlor that he possessed specialized investment expertise. Reed accepted the appointment knowing the settlor relied on that representation. Reed therefore became obligated to apply those special skills when managing the trust assets.
The party must demonstrate that it reasonably relied on the promise by materially changing its position and that the promisor could have foreseen the reliance. Courts then determine whether injustice can be avoided only by enforcement.
Supporting sources
A retraction is effective only if it reaches the injured party before that party materially changes position in reliance on the repudiation. Preparatory steps that do not yet constitute a material change will not bar the retraction.
…in stating that abortion of a quick fetus was a "misprision," a term they translated to mean "misdemeanor."[^maj-28] That their reliance on Coke on this aspect of the law was uncritical and, apparently in all the reported cases, dictum (due probably to the paucity of common-law prosecutions for post-quickening abortion),…
…as applied to a handbill having a commercial message on one side but a protest against certain official action on the other. The reliance is wholly misplaced. The Court in Chrestensen reaffirmed the constitutional protection for "the freedom of communicating information and disseminating opinion"; its holding was based upon…
…tempered attitudes and lent some color of authority to the approach now taken by the Court. I turn now to the Court's asserted reliance on the Fifth Amendment, an approach which I frankly regard as a trompe l'oeil . The Court's opinion in my view reveals no adequate basis for extending the Fifth Amendment's privilege…
…has been recognized by successive legislatures, and acted upon by the Judicial Department as a law of obligation. Practice and reliance on legislative exposition should have considerable weight, especially where large property interests have arisen from it. The bill for incorporating the Bank of the United States was…
…law," Radovich v. National Football League , 352 U. S. 445, 455 (1957) (Frankfurter, J., dissenting), and may be subject to reliance
Liability arises when the actor intends or should realize that the statement will induce action involving an unreasonable risk of harm and knows the statement is false. The resulting physical harm must flow directly from the reliance.
A servitude may arise despite the statute of frauds when the beneficiary substantially changes position in justifiable reliance on the existence of the servitude and injustice can be avoided only by giving effect to the parties' intent.
A person who consents to being represented as a partner is liable to those who enter transactions in reliance on the representation. Consent by fewer than all partners limits liability to the consenting partners and the purported partner.