Twenty years after you leave college you are rich and famous. Your college calls on you for a $10 million gift to renovate a classroom building and name the building in your honor. You tell them you will be glad to give the gift because you learned so much and that is why you are successful. A year later the building is renovated and the college asks for the money. You decide to spend it on a new jet and tell the college to get stuffed. You:
A) do not have to pay the money, promises of gifts do not create contracts
B) do not have to pay the money unless your promise was in writing and for a specific date
C) have to pay an amount equal to how much has been spent on the renovation work to date, not the full amount
D) have to pay the money under the rule of promissory estoppel
E) have to pay the money under the rule of unliquidated debt

Question

Quizplus · Accepted Answer

This scenario involves the concept of promissory estoppel, which states that even if a promise is not in writing and does not create a binding contract, it can still be enforced if one party relies on it to their detriment. In this case, the college relied on the promise of a $10 million gift to renovate the classroom building and name it after the person. If that person reneges on the promise and spends the money elsewhere, it would be a breach of the promise, and the college could seek legal action to hold them accountable. The person would have to pay the money under the rule of promissory estoppel, which prevents them from unfairly benefiting from the broken promise.

Twenty Years After You Leave College You Are Rich and Famous