Nancy, who lives in Birdville, wants to open a McHenry Roast Chicken franchise. Mark, a representative of McHenry, told Nancy, "If you will buy a lot and build a building in River City, we will give you a franchise." Nancy bought the lot and built the building as instructed only to discover that McHenry had awarded the franchise to a large corporation. McHenry claims no liability to Nancy since there was no consideration. Which statement best describes the situation?
A) McHenry is not liable to Nancy since there was no consideration.
B) McHenry is not liable to Nancy since there was past consideration.
C) McHenry is liable to Nancy since adequate consideration was given by both parties.
D) McHenry is liable to Nancy based on the concept of promissory estoppel.

Question

Quizplus · Accepted Answer

McHenry is liable to Nancy based on the concept of promissory estoppel, which applies when a promise is made that the promisor should reasonably expect to induce action or forbearance on the part of the promisee, the promisee justifiably relies on the promise, and injustice can only be avoided by enforcing the promise. Nancy's actions were based on McHenry's promise, leading to her financial expenditure.

Nancy, Who Lives in Birdville, Wants to Open a McHenry