Plaintiffs in harmful reliance cases are often only entitled to “reliance” damages, which define as damages that are directly proportional to the losses incurred by the claimant as a consequence of their reliance. The plaintiff’s damages must only be sufficient to compensate them by placing them in a financial situation that is as near as possible to their financial position if the promise was never issued. Let us go back to the previous illustration. Expectation damages, which account for the “worth” of the delivery of toys if the defendant had bought them, may be available in a standard breach of contract lawsuit. For illustration, if the toys had sold for $100,000, they would be allowed to obtain that sum as compensation for the losses.
It is a legal term that refers to a legal obligation to perform a promise. Typically, the plaintiff would assert that the defendant offered her something, that she correctly relied on just that promise, and that she was harmed due to her reliance. “Detrimental reliance” is another term used to describe how she depended on the promises and damages as a consequence. Even though there is no valid contract, Patty legitimately relied on the defendant’s assurances, and as a consequence, she incurred an economic loss. One can see this in action in the video to the right. Because of her adverse reliance on the defendant’s promise, she may be entitled to seek damages from the defendant under the doctrine of promissory estoppel. Detrimental reliance arises when a party persuades to depend on another’s promise. In several jurisdictions, a plaintiff may sue for harmful reliance if the reliance caused them damage. Virginia does not accept promissory estoppel as a basis of action for harmful reliance. However, Virginia plaintiffs may utilize equitable estoppel to defend against harmful reliance. Promissory estoppel recognizes in D.C. and Maryland. Also, commitments made in another state may be enforceable in Virginia courts due to a legal oddity called conflicts of law.
In addition, dangerous dependence is an aspect of a fraud-based action. When a plaintiff brings a fraud claim, they must demonstrate that
defendant made a statement;
the claim was incorrect;
the person knows the claim was incorrect;
plaintiff primary function on the declaration; and
plaintiff suffered harm as a consequence of that reliance.
Negative dependence defines as the combination of the last two criteria listed above (sound and harm). For example, suppose the defendant deceives the plaintiff by informing him how she has discovered a cure for diabetes, and the plaintiff falls for her deception. If the plaintiff invests the business, the defendant may be held responsible for fraud. In this case, the defendant invested in the plaintiff’s business based on her promise to find a cure for diabetes. His investment is useless, and as a result, he has suffered from his reliance on her false promise.
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