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 Wisconsin, 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 upon to their detriment. For promissory estoppel to be invoked in Wisconsin, certain elements must be established: (1) a promise was made; (2) the promise led to an action or forbearance on the part of the promisee; (3) the reliance on the promise was reasonable; and (4) the reliance resulted in a detriment to the promisee. If these elements are met, the party who made the promise may be estopped from denying the enforceability of the contract. This principle is rooted in the interests of fairness and justice, ensuring that parties cannot renege on their promises when the other party has reasonably relied on them to their harm. However, it is important to note that detrimental reliance is not a separate cause of action in tort; it is a doctrine applied within the context of contract law.