![]() The defendant insists that no such promise was made. ![]() Accordingly, the plaintiff sued the defendant under a promissory estoppel theory. It is undisputed that the defendant’s alleged promise was not made in a signed writing, at least none that the plaintiff could find. However, once the expansion was underway, and after the business debts began piling up, the defendant refused to pay, resulting in the business failure and considerable damages. The defendant, a close friend, encouraged the expansion and, according to the plaintiff, the defendant supposedly promised to pay all business obligations if the plaintiff could not. It is important to know and understand the scope of each rule, because a mistake can result in wholly unintended and costly consequences.Ĭonsider a hypothetical dispute in which the plaintiff is in business and hoped to expand. Sometimes the statute of frauds and promissory estoppel intersect sometimes they collide. To succeed on a claim for promissory estoppel one must be able to prove: (1) a promise was made, (2) that the promisor should reasonably have expected to induce action of a definite and substantial character on the part of the promisee, and (3) that the promise, in fact, produced reliance or forbearance of that nature in circumstances such that the promise must be enforced if injustice is to be avoided. ![]() The statute of frauds notwithstanding, Michigan law also respects and enforces certain oral promises under the promissory estoppel doctrine. Section 132 does, however, have its limitations. The statute of frauds, when applicable, is a powerful defense that can end a lawsuit quickly and relatively inexpensively. In particular, a promise to pay a debt owed by someone else must be made by a signed writing to be legally enforceable as set forth under MCL 566.132(1)(b). Michigan’s version of the statute of frauds, MCL 566.132(1), provides that “an agreement, contract, or promise is void unless that agreement, contract, or promise, or a note or memorandum of the agreement, contract, or promise is in writing and signed with an authorized signature by the party to be charged.”
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