The Uncertain Role of Reliance in the Enforcement of Charitable Subscriptions

Authors

Christine Abely, New England Law | Boston

First Page

113

Abstract

In cases where charitable promises are made and later retracted, the Restatement (Second) of Contracts provides conflicting guidance as to how a court should factor in reliance by the charity when considering whether to enforce the promised donation by way of promissory estoppel. Specifically, the text of § 90(2) within the Second Restatement provides that a charitable subscription is binding “without proof that the promise induced action or forbearance.” The adoption of this provision represented a departure from the requirement of reliance historically necessary for the enforcement of most types of promises by promissory estoppel. According to the Second Restatement, however, reliance remains relevant to the determination of whether enforcement of a promise is necessary to avoid injustice, which is a required element to enforce a charitable subscription pursuant to § 90(2). Namely, Comment b to § 90, discussing the character of reliance protected, notes that enforcement of the promise must be necessary to prevent injustice, one factor of which is the nature and extent of reliance; such reliance “need not be of substantial character in charitable subscription cases.” Comment f states that for charitable subscriptions where recovery is rested on reliance, “a probability of reliance is enough,” although American courts “have found consideration in many cases where the element of the exchange was doubtful or nonexistent.” Moreover, Illustration 17 to Comment f describes a situation where reliance does in fact support enforcement of a charitable subscription.

This Article suggests that this discussion in these comments and this illustration of the continued role of reliance in the enforcement of charitable subscriptions by way of promissory estoppel may provide one reason as to why the rule set forth in § 90(2) is not more widely adopted across U.S. jurisdictions as the governing common law principle. Specifically, as these comments provide a discussion of how reliance can suffice to support the necessary element of unavoidable injustice absent enforcement, there may be less of a clear justification for courts to abandon the traditional rule that some form of reliance must be shown in order to justify such enforcement. The element of enforcing a promise only where injustice can be avoided thereby may serve as a back door to maintaining a sort of reliance requirement in the context of § 90(2), albeit somewhat loosened for charitable subscriptions compared with other types of promises.

The comments accompanying § 90(2) of the Restatement (Second) of Contracts should therefore be clarified to state that charitable subscriptions should, in fact, be enforced without regard to the presence of any action or forbearance taken by the charity in reliance on the promise. Such a clarification would align with the expressed intent of the drafters of the Second Restatement in creating the separate § 90(2) provision apart from the general doctrine of promissory estoppel. This Article also recommends that the text of § 90(2) itself be amended to clarify that a charitable subscription can be enforced without regard to whether injustice could be avoided only by enforcement of the promise. Rather, in the interests of promoting private philanthropy, the injustice element would be assumed to be satisfied by the fact that a charitable subscription had been made.

Recommended Citation

Christine Abely, The Uncertain Role of Reliance in the Enforcement of Charitable Subscriptions, 26 Lewis & Clark L. Rev. 113 (2022).
Available at: https://lawcommons.lclark.edu/lclr/vol26/iss1/4