How a Promise Can Lead You to Court: A Guide to Promissory Estoppel

Imagine your lease is about to expire, and your landlord tells you, “don’t worry about moving out – I’ll let you stay another year at the same rent.” Relieved, you stop looking for a new place.

But then, out of the blue, your landlord suddenly changes their mind – and now they want to increase your rent or worse, ask you to leave. This is not an impossible scenario to find yourself in, where someone breaks a promise. But what options do you have for recourse in this scenario, and are you able to make them honour their original promise? The answer may lie in the doctrine of promissory estoppel.

Normally, courts require written evidence before enforcing a rental agreement, since they fall under contract law. But what if there’s no written contract – just a promise you relied on? That’s when the law of equity can step in to prevent someone going back on their word when it would be unfair to let them do so.

To enforce a promise made to you; or use promissory estoppel, you generally need to show four things:

1.     A clear promise was made

For example, your landlord said you could stay another year at the same rent.

2.     It was reasonable for you to rely on that promise

You believed your landlord and stopped looking for another place.

3.     You actually relied on the promise

Maybe you paid the same rent as before, or made financial plans based on staying put and paying the rent you had previously being paying.

4.     You suffered a loss when the promise was broken

For instance, you bought a new car and committed to a re-payment plan, thinking your rent would stay the same, and now you can’t afford the new rent.

In these circumstances, courts may stop the landlord from going back on their word – not because there was a contract, but because breaking the promise would be unfair.

If you would like to discuss promissory estoppel or any other contract-related matter in Ontario, please reach out to us at McDonald Simon LLP. Our team is here to provide expert legal guidance and help you understand your rights and obligations. Don’t hesitate to contact us for a consultation - we’re ready to assist you!

Please reach out to us at info@mcdonaldsimon.com or call us at 519-273-2734.

Disclaimer: This blog should not be construed as legal advice. Each individual circumstance has nuances that need to be considered by a licensed legal professional and there is no one-size-fits-all answer in the law. If you require legal advice, please contact someone who is licensed with the Law Society of Ontario and is properly insured to provide legal services or practice law.