Hoffman v. Red Owl Stores, Inc.

Supreme Court of Wisconsin, 1965.

26 Wis.2d 683, 133 N.W.2d 267.

Dawson, pp. 409-414

Facts: Hoffman owned a bakery, but wanted to open a Red Owl store. Red Owl assured him that he could open one for $18,000. He started working on opening a store, which included selling the bakery, buying and later selling a small grocery store, paying the option on a lot in Chilton, renting a house in Chilton, and moving to Neenah. Then Red Owl starting raising the amount of capital they wanted from Hoffman to be able to open the store. Hoffman backed out of negotiations and sued Red Owl. The trial court found that Hoffman had acted to his detriment in reasonable reliance on Red Owl’s promises, and awarded him reliance damages. The defendant appealed. On appeal, the judge upheld everything except for the damages for the sale of the small grocery store. The defendants appealed again.

Issue: Shall Wisconsin adopt § 90, and if so, it is applicable to the facts of this case?

Rule: Insofar as it’s necessary to prevent injustice, a promisor will be held to their promise if they reasonably expected that promise to induce reliance on the part of the promisee and they actually did so.

Analysis: The court finds that there was reliance and that the promise must be enforced in order to prevent injustice.

The court also goes over the damages and finds them all reasonable except for the damages related to selling the small grocery store.

Conclusion: The order of the appellate court is affirmed.

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