Formation of contracts - Obligations enforceable without a b...

Learning Outcomes

This article explores obligations enforceable without a traditional bargained‑for exchange on the MBE, including:

• Identifying when a promise lacking consideration is nonetheless enforceable through promissory estoppel based on reasonably foreseeable, detrimental reliance.
• Distinguishing quasi‑contract (restitution) from true contracts and implied‑in‑fact agreements, and applying the elements of unjust enrichment to typical bar‑exam fact patterns.
• Recognizing when a benefit is conferred officiously or as a gift so that restitution is unavailable, and when emergency or mistaken benefits support recovery in quantum meruit.
• Evaluating promises grounded in moral obligation, past consideration, or material benefits, and determining when minority “promissory restitution” doctrines or debt‑reaffirmation rules make such promises enforceable.
• Analyzing promises to pay debts that are time‑barred, discharged in bankruptcy, or incurred during minority, and selecting the correct legal theory and scope of enforcement.
• Choosing among expectation, reliance, and restitution as the proper measure of recovery, and matching each remedy to the governing doctrine in multiple‑choice questions.
• Developing a step‑by‑step approach for classifying exam hypos as contract, promissory estoppel, or quasi‑contract problems, and avoiding common MBE traps involving mislabeled consideration or misapplied remedies.

MBE Syllabus

For the MBE, you are required to understand obligations enforceable without a bargained‑for exchange, with a focus on the following syllabus points:

• Identification and application of promissory estoppel (detrimental reliance) as a consideration substitute.
• Recognition of quasi‑contract (restitution / unjust enrichment) and its elements.
• Distinction between restitution, reliance, and expectation measures of recovery.
• Understanding of past consideration, moral obligation, and the material benefit rule.
• Awareness of promises to pay debts unenforceable on technical grounds (e.g., statute of limitations, bankruptcy) and their enforceability.
• Ability to separate quasi‑contract from implied‑in‑fact contracts in exam fact patterns.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. A promise which the promisor should reasonably expect to induce action or forbearance and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. This statement describes:
   1. Mutual Assent
   2. Bargained‑for Consideration
   3. Promissory Estoppel
   4. Quasi‑Contract
2. Which remedy seeks to prevent unjust enrichment by requiring a defendant to pay for a benefit conferred by the plaintiff?
   1. Expectation Damages
   2. Specific Performance
   3. Restitution
   4. Reliance Damages
3. A homeowner sees a landscaping crew mistakenly begin extensive work on her yard, believing it to be her neighbor's property. The homeowner says nothing. The landscaping company later bills the homeowner for the fair market value of the work. Which doctrine is most likely to allow the landscaping company to recover?
   1. Express Contract
   2. Promissory Estoppel
   3. Quasi‑Contract
   4. Implied‑in‑Fact Contract
4. A woman orally promises her nephew, “Because you saved my life last year, I’ll pay you $20,000.” There was no prior understanding about payment. Under the majority rule, this promise is:
   1. Enforceable because of the nephew’s material benefit to the aunt
   2. Enforceable because of promissory estoppel
   3. Unenforceable because it lacks consideration and no exception applies
   4. Enforceable if put into a signed writing
5. A debtor’s 8,000loanisbarredbythestatuteoflimitations.Thedebtorlateremailsthecreditor:“Iknowyoucan’tsueme,butIwillpayyou8,000 loan is barred by the statute of limitations. The debtor later emails the creditor: “I know you can’t sue me, but I will pay you 8,000loanisbarredbythestatuteoflimitations.Thedebtorlateremailsthecreditor:“Iknowyoucan’tsueme,butIwillpayyou3,000 toward the old loan.” The debtor then refuses to pay. The creditor sues for 3,000.Thelikelyresultis:a)Norecoverybecausetheoriginaldebtistime‑barredb)Recoveryof3,000. The likely result is: a) No recovery because the original debt is time‑barred b) Recovery of 3,000.Thelikelyresultis:a)Norecoverybecausetheoriginaldebtistime‑barredb)Recoveryof8,000 because the debtor reaffirmed the whole debt
   1. Recovery of $3,000 because the later promise is enforceable without new consideration
   2. No recovery because the later promise is not supported by new consideration

Introduction

Most contract questions on the MBE turn on whether there was consideration—a bargained‑for exchange of legal value. But the syllabus also requires you to know the important pockets where obligations are enforceable without that exchange. These doctrines operate either as:

• A substitute for consideration (the promise is enforced despite the lack of a bargain), or
• A non‑contractual obligation that nonetheless requires payment to avoid unjust enrichment.

The three main areas are:

• Promissory estoppel (detrimental reliance)
• Quasi‑contract (restitution / unjust enrichment)
• Moral obligation and past consideration (including the material benefit rule and debt‑reaffirmation doctrines)

Before going into each doctrine, it helps to anchor the discussion with key definitions that appear repeatedly in MBE questions.

Key Term: Consideration
Consideration is a bargained‑for exchange in which each party incurs a legal detriment or confers a legal benefit as the price of the other’s promise. The detriment or benefit must be sought by the promisor and given by the promisee in exchange for the promise.

Key Term: Promissory Estoppel
Promissory estoppel is an equitable doctrine allowing enforcement of a promise that the promisor should reasonably expect to induce action or forbearance, and that does induce such reliance, if enforcing the promise (often to a limited extent) is the only way to avoid injustice.

Key Term: Detrimental Reliance
Detrimental reliance is a change of position by the promisee (acting or refraining from acting) in response to a promise, where that change leaves the promisee worse off if the promise is not performed.

Key Term: Quasi‑Contract
Quasi‑contract (or “implied‑in‑law” contract) is not a real contract but a restitutionary obligation imposed by law to prevent unjust enrichment when one party confers a benefit on another in circumstances where payment is reasonably expected.

Key Term: Unjust Enrichment
Unjust enrichment is a person’s retention of a benefit conferred by another under circumstances that make it unfair to retain the benefit without compensating the other party.

Key Term: Restitution
Restitution is the measure of recovery in quasi‑contract, requiring the recipient of a benefit to restore the reasonable value of that benefit, or the amount by which they were unjustly enriched.

Key Term: Reliance Damages
Reliance damages compensate expenditures and other losses caused by reliance on a promise, aiming to put the promisee in the position they would have been in had the promise never been made.

Key Term: Expectation Damages
Expectation damages are the usual contract measure, aiming to put the promisee in the position they would have occupied if the contract had been fully performed.

Key Term: Moral Obligation
Moral obligation refers to a non‑legal sense of duty (e.g., based on gratitude or ethics) that, standing alone, does not normally create an enforceable contract.

Key Term: Material Benefit Rule
The material benefit rule is a minority doctrine under which a promise made in recognition of a substantial, previously conferred benefit may be enforceable (promissory restitution) to the extent necessary to prevent injustice.

Key Term: Officious Intermeddler
An officious intermeddler is a person who unilaterally confers benefits on another without request or justification, and who is generally denied restitution because the recipient had no reason to expect payment.

Key Term: Implied‑in‑Fact Contract
An implied‑in‑fact contract is a true contract formed by the parties’ conduct rather than words, showing mutual assent and consideration (e.g., sitting in a barber’s chair implies a promise to pay for a haircut).

Key Term: Past Consideration
Past consideration is a benefit conferred in the past, before the promise is made. Because it is not bargained for as part of the later promise, it is not valid consideration.

Key Term: Quantum Meruit
Quantum meruit is a restitutionary measure meaning “as much as is deserved,” typically used to describe the reasonable value of services conferred on another.

Key Term: Promissory Restitution
Promissory restitution is enforcement of a promise made in recognition of a prior, unrequested material benefit, even though there was no bargain, under doctrines such as the material benefit rule.

Key Term: Charitable Subscription
A charitable subscription is a written or oral pledge to make a gift to a charity or similar institution; many courts enforce such pledges, sometimes without proof of reliance.

Overview: Where These Doctrines Fit in the Consideration Framework

On the MBE, the first step in any contracts problem is usually:

• Was there offer, acceptance, and consideration?

If the answer is “no” to consideration, you must immediately think about:

• Promissory estoppel – is there a promise plus reliance?
• Quasi‑contract / restitution – is there a benefit conferred that would be unjust to retain for free?
• Moral obligation exceptions – is there a promise to pay a barred debt, or a promise made after receiving a material benefit?

A classic trap is to label something as “past consideration” and then stop. On the exam, past consideration by itself does not make a promise enforceable, but it should alert you to possible:

• Material benefit rule (promissory restitution), or
• Promise to pay a barred or discharged debt (statutory or common‑law exceptions).

With those guideposts, turn to each doctrine in turn.

Promissory Estoppel (Reliance)

Promissory estoppel is the most important consideration substitute on the MBE. It provides a basis to enforce a promise when:

• There is no bargained‑for exchange, but
• The promisee reasonably relied on the promise in a way that would make non‑enforcement unfair.

You can think of promissory estoppel as filling the gap in cases where strict consideration analysis would deny relief, yet the promisor induced substantial reliance.

Elements of Promissory Estoppel

Under the Restatement (Second) of Contracts, the usual formulation requires:

1. Clear and definite promise: The promisor must have made a commitment, not merely expressed a hope, prediction, or invitation to negotiate.

   • “I’ll take care of you someday” is usually too vague.
   • “If you do X, I will pay you $10,000” is sufficiently definite.

   Courts are more willing to find a “promise” where the language is concrete (an amount, a time period, or a specific performance) and directed to a specific person.

2. Reasonable expectation of reliance: The promisor must have reason to foresee that the promisee would act (or refrain from acting) in response.

   • The more specific and serious the promise, the more likely this is satisfied.
   • Promises about jobs, homes, and large sums of money are especially likely to create foreseeable reliance.

   On the MBE, if the promisor knows the promisee is about to make a major life change (quit a job, move, sell property) based on the promise, foreseeability is usually present.

3. Actual, reasonable, and detrimental reliance: The promisee must in fact change position in reliance, and that reliance must be reasonable in the circumstances and detrimental.

   • Merely hoping or planning, without any change of position, is not enough.
   • Reliance that is wildly disproportionate to the promise (e.g., spending $100,000 based on a$1,000 promise) may be deemed unreasonable.

   Detriment does not require out‑of‑pocket loss; giving up an alternative opportunity, forgoing a job offer, or relinquishing a legal right can suffice.

4. Injustice can be avoided only by enforcement: This is an open‑ended, equitable standard. Courts consider:

   • The definite and substantial character of the reliance
   • The formality (or informality) of the promise
   • The clarity of evidence that a promise was made
   • The availability of other remedies (e.g., restitution)
   • Whether full enforcement would be disproportionate to the reliance

If these elements are met, the promise is binding “to the extent necessary to avoid injustice.” That phrase signals that remedies are flexible; full expectation damages are not automatic.

Typical Promissory Estoppel Patterns on the MBE

Promissory estoppel is regularly tested in a predictable set of scenarios:

• Family promises:

  • “If you quit your job and move to be near me, I’ll give you my house.”
  • “If you don’t drink or smoke until you are 21, I’ll pay you $5,000.”

• Employment offers and promotions:

  • Leaving one job after being promised another
  • Relocating based on a promised promotion or long‑term employment

• Charitable subscriptions:

  • Written pledges to charities, especially when the charity changes its position (e.g., starts a building project) in reliance on the pledge.

• Subcontractor bids in construction projects:

  • A subcontractor’s bid relied upon by a general contractor in preparing its own bid.

In these fact patterns, traditional consideration often fails (e.g., at‑will employment, preliminary negotiations, revocable bids), so the doctrine is explicitly needed to make the promise enforceable.

Worked Example 1.1

Aunt Agatha told her nephew, Ben, “If you quit your job and go to law school, I will pay your tuition for all three years.” Ben, relying on this promise, quit his lucrative job and enrolled in law school. After Ben completed his first year, Aunt Agatha refused to pay any further tuition. Can Ben enforce Aunt Agatha's promise?

Answer:
Yes, likely under promissory estoppel. Aunt Agatha made a clear promise; she should reasonably have expected Ben to rely by quitting his job and enrolling; Ben did rely to his detriment; and refusal to enforce the promise (at least to cover reliance losses) would be unjust given his substantial change of position. Even though there may be no traditional consideration (Ben’s decision to attend law school was not bargained for as the price of the promise), promissory estoppel can make the promise enforceable.

The likely measure of recovery is reliance, not necessarily full three‑year tuition. A court might reimburse Ben’s first‑year tuition, his moving expenses, and perhaps some portion of lost earnings, but may not guarantee the entire cost of legal education.

Worked Example 1.2

A general contractor solicits bids from subcontractors to resurface a highway. Subcontractor Smith submits a written bid to do the asphalt work for $200,000. Relying on Smith’s bid, the contractor uses that figure in its overall bid to the state and is awarded the main contract. Before the contractor accepts Smith’s bid, Smith attempts to revoke it, claiming he miscalculated his costs. Can the contractor hold Smith to the$200,000 bid?

Answer:
In many jurisdictions, yes, under promissory estoppel. Smith’s bid was a clear promise; he should reasonably have expected the contractor to rely on it in compiling its own bid; the contractor in fact reasonably relied to its detriment by becoming obligated on the main contract; and allowing Smith to revoke would create a substantial loss for the contractor. Even though there is arguably no traditional consideration yet (the contractor had not formally accepted the bid), reliance can make the bid temporarily irrevocable.

On an MBE question, compare this to a UCC firm offer (which requires a signed writing by a merchant offering to buy or sell goods, and makes the offer irrevocable for up to three months without reliance). Here we are in a services context, so the UCC firm‑offer rule does not apply; promissory estoppel does the work.

Promissory Estoppel vs. Contract: When Is Reliance Just “Consideration”

Not every reliance case is promissory estoppel. Sometimes what looks like reliance is actually part of a bargained‑for exchange:

• If the promisor expressly requests the act (e.g., “If you paint my house, I’ll pay you $5,000”), then painting the house is consideration, not mere reliance.
• If the promisor’s desire to induce the reliance is the price of the promise, the doctrine is ordinary consideration.

Promissory estoppel is most important when:

• The promisor did not clearly bargain for the reliance, or
• Legal formalities (like the Statute of Frauds) prevent enforcement of a bargain.

Promissory Estoppel and the Statute of Frauds

Frequently, the transaction at issue falls within the Statute of Frauds (SoF) and is unwritten—for example:

• A land contract,
• A service contract not performable within one year, or
• A suretyship promise.

Courts are divided on whether promissory estoppel can be used to circumvent the SoF. On the MBE, assume the following:

• Promissory estoppel may justify some relief where the promisee’s reliance is substantial and foreseeable.
• Courts are cautious about granting full expectation damages when the SoF is not satisfied.
• Many courts limit relief to reliance or restitution, not specific performance or full contract damages.

Thus, if you see an oral land contract plus reliance (e.g., payment, possession, and improvements), first think about:

• Traditional SoF exceptions such as part performance, and
• Only then, if the question emphasizes “reliance” language, consider promissory estoppel as an alternative route.

Promissory Estoppel and At‑Will Employment

A recurring pattern involves promises in the employment context:

• A promise of “permanent employment” is typically interpreted as at‑will, which ordinarily means either party can terminate at any time without cause.
• Nevertheless, if the employer makes more specific promises (“You will have this job for at least three years”), and the employee quits a secure job and relocates, promissory estoppel may support recovery even though the contract might otherwise be at‑will or lack definite duration.

The remedy is often limited to reliance:

• Moving expenses
• Lost wages from the prior job
• Other out‑of‑pocket costs

Courts are reluctant to convert promissory estoppel in this setting into a guarantee of continued employment for the full stated period.

Promissory Estoppel, “Preliminary Negotiations,” and Disclaimers

Exam questions sometimes involve:

• Letters of intent,
• “Agreements in principle,” or
• Negotiations marked “subject to contract” or “not binding until signed.”

Promissory estoppel is unlikely to apply where:

• The parties expressly state that no obligations arise until a formal written contract is executed, and
• The reliance consists mainly of negotiation expenses.

If the facts stress:

• A clear disclaimer of binding intent, and
• No concrete promises about performance or payment,

courts typically refuse to apply promissory estoppel. On the MBE, look carefully at the language used; a clear “not binding” clause usually defeats both contract and promissory estoppel claims.

Remedy in Promissory Estoppel Cases

Remedies under promissory estoppel are flexible and often limited:

• Courts frequently award reliance damages, reimbursing expenditures and losses caused by the reliance.
• In some cases, courts award expectation‑like recovery (the value of the promised performance) if:
  • Reliance is hard to measure, and
  • Full enforcement is not disproportionate to the reliance.

On MBE problems:

• When the facts emphasize money spent or opportunities lost, answer choices describing reliance or “out‑of‑pocket” damages are usually correct.
• When the facts emphasize the promised sum and the equities are strong (e.g., a charitable pledge scenario), the exam might support full enforcement, often with language like “as justice requires.”

Quasi‑Contract (Restitution / Unjust Enrichment)

Quasi‑contract is fundamentally different from promissory estoppel. It does not enforce a promise; instead, it prevents one party from being unjustly enriched at another’s expense.

Key features:

• No actual contract: no mutual assent, no consideration.
• The obligation is imposed by law.
• The claim is usually styled as “restitution,” “unjust enrichment,” or “quantum meruit,” not “breach of contract.”

Elements of Quasi‑Contract

A plaintiff seeking restitution must generally show:

1. Benefit conferred: The plaintiff conferred a measurable benefit (goods, services, money, or saving the defendant from loss).

2. Reasonable expectation of payment: The plaintiff conferred the benefit with the reasonable expectation of being paid. Voluntary gifts do not qualify.

3. Knowledge and acceptance / retention: The defendant knew or had reason to know of the benefit and accepted or retained it.

4. Unjust enrichment: Under the circumstances, it would be unfair for the defendant to retain the benefit without paying for it.

Recovery is denied to officious intermeddlers—people who thrust benefits on others without request or justification and then demand payment.

Worked Example 1.3

Doctor Evans is walking down the street when she sees Pedestrian Pete collapse from a sudden heart attack. Doctor Evans renders emergency medical aid that saves Pete's life. Pete was unconscious and could not consent. Can Doctor Evans recover the reasonable value of her services from Pete?

Answer:
Yes, under quasi‑contract. Evans conferred a substantial benefit (life‑saving medical services); as a professional she reasonably expects to be paid for such services; Pete retained the benefit; and it would be unjust for him to retain it without compensation. This is not officious intermeddling: emergency circumstances prevented prior consent, and services of this type are normally paid for.

Worked Example 1.4

A landscaping company is hired to renovate the backyard at 12 Oak Street. Due to a mistake, it performs the work at 10 Oak Street, the neighbor’s property. The neighbor watches, realizes the mistake, and says nothing. The work substantially increases the value of the neighbor’s property. Can the landscaping company recover the fair value of the work from the neighbor?

Answer:
Yes, likely in quasi‑contract. The company conferred a measurable benefit; it customarily expects payment; the neighbor knew or should have known that the work was being done under a mistake and silently accepted the benefit; and allowing the neighbor to keep the enhanced yard without paying would unjustly enrich him. The neighbor is not being forced to take an unwanted benefit; his silent acquiescence makes restitution appropriate.

Contrast this with a true officious intermeddler: if the landscaper unilaterally redesigned the yard without reason to believe the owner wanted the work, restitution would likely be denied.

Worked Example 1.5

A bank mistakenly transfers $10,000 into Dana’s account due to a clerical error. Dana, who had no reason to expect such a deposit, spends the entire$10,000 on a luxury vacation before the bank discovers the mistake and demands repayment. Can the bank recover?

Answer:
Generally yes, under restitution. The bank conferred a monetary benefit by mistake; the bank had a clear expectation that the funds remained its property; Dana retained and used the funds; and it would normally be unjust for her to keep money that never belonged to her. Some jurisdictions allow a limited “change of position” defense if Dana can show she reasonably believed the money was hers and cannot return it without hardship, but as a default rule the bank’s restitution claim is strong.

Quasi‑Contract vs. Implied‑in‑Fact Contract

A frequent MBE trap is confusing quasi‑contract with an implied‑in‑fact contract.

• Implied‑in‑fact contract: The parties’ conduct shows mutual assent and consideration.

  • Example: You sit in a barber’s chair and say nothing; your conduct implies a promise to pay the usual price. There is a real contract; if the barber sues, she seeks expectation damages.

• Quasi‑contract: No mutual assent; an obligation is imposed purely to prevent unjust enrichment.

  • Example: A hospital provides emergency care to an unconscious accident victim; there is no consent, but restitution is available.

On the exam:

• If there is clear course of dealing or conduct that objectively shows agreement on price and services, you are in contract territory.
• If the facts stress mistake, emergency, or an unenforceable contract, and the plaintiff seeks the value of the benefit, you are in restitution territory.

Restitution When a Contract Is Unenforceable or Void

Quasi‑contract plays a key role when a contract is:

• Unenforceable (e.g., violates the Statute of Frauds), or
• Void (e.g., due to incapacity or illegality).

Common patterns:

• A builder does substantial work under an oral contract that falls within the SoF and is unenforceable. The owner refuses to pay. The builder may not be able to enforce the contract price, but can often recover the reasonable value of labor and materials in restitution.

• A minor disaffirms a contract for necessities (e.g., food, lodging, medical care). Even though the contract is voidable, the provider may recover in restitution for the reasonable value of the necessaries.

• A party to an illegal contract (e.g., an unlicensed contractor where licensing is strictly protective) may be barred from contract recovery, but in some jurisdictions may still obtain restitution to prevent disproportionate forfeiture, depending on who the statute is designed to protect.

MBE strategy: When the fact pattern emphasizes that “the contract is unenforceable” but one side clearly conferred a benefit, focus on restitution, not expectation damages.

Restitution as an Alternative in Breach of Contract Cases

Even when there is a valid contract, a nonbreaching plaintiff sometimes chooses restitution rather than expectation:

• To avoid a losing contract (e.g., a contractor who realized the job will be unprofitable after partial performance), the contractor may sue for the value of performance conferred, rather than the contract price minus costs.
• If the breaching party has received a benefit (e.g., partial performance already rendered), the nonbreaching party may seek restitution to recover the value of benefits conferred.

However, where a valid contract fully governs the relationship and both parties have performed substantially, courts usually confine parties to contract remedies and do not allow quasi‑contract to rewrite a bad bargain.

Remedy in Quasi‑Contract Cases

The remedy is restitution, usually measured as:

• The reasonable value of the plaintiff’s performance (quantum meruit), or
• The amount by which the defendant has been enriched, if that is easier to measure.

Important points:

• The plaintiff’s costs may exceed the value of the benefit. Restitution does not guarantee full cost recovery; it focuses on the defendant’s gain.
• Restitution does not punish; it simply strips unjust enrichment.
• If the defendant’s enrichment is zero (e.g., services were worthless or had to be redone), restitution may be minimal or none, even if the plaintiff expended effort.

Moral Obligation and Past Consideration

Many promises are made out of gratitude or moral duty rather than bargaining. The general rule is that such promises are not enforceable because they lack consideration.

Past Consideration and Moral Obligation: General Rule

Recall:

• Past consideration: A benefit given or service rendered before the promise was made cannot count as consideration for a later promise.
• A pure moral obligation (e.g., “I feel I should pay you for what you did years ago”) does not make a promise enforceable.

Example:

• You rescue a stranger from a burning car. A week later, the rescued driver says, “You saved my life; I promise to pay you $10,000.” If you sue when she does not pay, most courts hold the promise unenforceable: your rescue occurred before the promise; it was not sought as the price of the promise.

The exam will often present such situations to see whether you:

• Incorrectly treat the promise as supported by consideration, or
• Correctly recognize it as past consideration and then consider whether any exception applies.

Those exceptions fall into two categories:

• Promissory restitution / material benefit rule (a minority rule), and
• Debt‑related moral obligation doctrines (promises to pay barred or discharged debts).

The Material Benefit Rule (Promissory Restitution – Minority)

Under the material benefit rule (Restatement and a minority of states), a promise is binding to the extent necessary to prevent injustice if:

• The promisor received a substantial material benefit from the promisee before the promise, and
• The subsequent promise is made in recognition of that benefit, and
• The benefit was not intended as a gift, and
• The promise is not disproportionate to the benefit.

This doctrine is sometimes labelled promissory restitution because it enforces a promise doing moral “catch‑up” for a prior benefit.

Typical fact pattern:

• Rescues from physical danger (pulling someone from a burning building or dangerous situation),
• Rescues of property of great value,
• Expensive services mistakenly performed for the promisor, later acknowledged by a promise to pay.

Worked Example 1.6

Driver falls asleep at the wheel and drives off a bridge into a river. Rescuer dives in, risks his life, and pulls Driver to safety, suffering injuries in the process. A month later, Driver, now recovered, promises in writing to pay Rescuer $25,000 “in gratitude for saving my life.” Driver later refuses to pay. In a jurisdiction following the material benefit rule, can Rescuer recover?

Answer:
Possibly yes. Driver received a significant material benefit (his life); Rescuer incurred risk and injury; the promise was made in recognition of that benefit; and $25,000 is arguably proportionate. If the jurisdiction adopts the material benefit rule, the promise may be enforceable to the extent necessary to avoid injustice (promissory restitution).

On the MBE, unless the facts expressly mention the material benefit rule or state that the jurisdiction follows the minority rule, you should assume the majority rule: the promise is not enforceable as a contract, though Rescuer might recover in restitution for any measurable benefit conferred, if not fully compensated already.

Debt‑Related Moral Obligation Doctrines

A separate set of doctrines treats certain promises as enforceable despite lack of new consideration because they relate to pre‑existing debt:

1. Promise to pay a debt barred by the statute of limitations:

   • If a debtor makes a new promise—very often required to be in writing, or evidenced by partial payment—on a debt that is time‑barred, the new promise is enforceable without new consideration.
   • The new promise is treated as creating a new obligation. In many jurisdictions, it is enforceable even if it acknowledges that the old debt cannot be sued upon.

2. Promise to pay a debt discharged in bankruptcy:

   • A debtor may reaffirm a discharged debt. A clear new promise by the debtor to pay a discharged debt can be enforceable, usually to the extent of the new promise, without new consideration.

3. Promise by a former minor after reaching majority:

   • At common law, a new promise by a former minor, after turning 18, to honor a contract made during minority could be enforceable without new consideration. Some modern statutes alter this, but the MBE still treats the traditional doctrine as relevant.

These doctrines reflect the idea that legal technicalities (limitational bars, discharge rules) do not always align with moral obligations; the law sometimes allows people to re‑commit themselves voluntarily.

Worked Example 1.7

A debtor owed a creditor $5,000 under a written loan agreement. The statute of limitations expired on the debt two years ago. Last week, the debtor emailed the creditor: “I know the old loan is legally unenforceable, but I will pay you the full$5,000 anyway.” The debtor then refuses to pay. May the creditor recover?

Answer:
In most jurisdictions, yes. A clear new promise to pay a debt barred by the statute of limitations is enforceable without new consideration. The new promise is treated as a separate, binding obligation for the full amount promised. The fact that the debtor explicitly recognized the legal unenforceability strengthens the conclusion that this is a deliberate reaffirmation, not mere puffery.

Worked Example 1.8

A debtor’s $10,000 credit card debt was discharged in bankruptcy. Six months later, the debtor writes to the credit card company: “I feel bad about the discharge; I will pay you$3,000 of what I owed.” The debtor then refuses to pay anything. Can the creditor enforce the promise to pay $3,000?

Answer:
Typically yes, for $3,000. A post‑discharge promise to pay part of a discharged debt is enforceable as to the amount promised, even though there is no new consideration. The debtor’s moral obligation plus the new promise create an enforceable obligation for the limited amount, not for the original$10,000.

Charitable Subscriptions

Charitable pledges occupy a special niche. Many courts now hold that:

• A written charitable subscription is enforceable without proof of reliance, as a matter of public policy; or
• At least, that charitable subscriptions are especially strong candidates for promissory estoppel, where reliance can be shown.

On the MBE:

• If a charity clearly changes position (e.g., enters into building contracts, hires staff, incurs expenses) in reliance on a pledge, promissory estoppel is the cleanest route.
• If the fact pattern emphasizes a written pledge and refers to a modern approach, the answer may treat the promise as enforceable even without detailed reliance facts.

Worked Example 1.9

Donor signs a written pledge: “I hereby promise to donate $100,000 to College to fund a new scholarship.” Relying on the pledge, College hires a fundraising director and begins recruiting students for the scholarship. Donor later repudiates. Is the pledge enforceable?

Answer:
Yes, likely under promissory estoppel (and in many jurisdictions, as a charitable subscription). The pledge is a clear promise; College’s reliance in hiring staff and planning scholarships is reasonably foreseeable and actually occurred; and injustice would result if College is left with unreimbursed costs. The likely measure of damages is at least College’s reliance expenditures (e.g., salary of the director, costs of recruitment), and some courts would enforce the full $100,000 if necessary to avoid injustice.

Moral Obligation and Remedies

Where a promise based on past benefits is held enforceable (e.g., under the material benefit rule or a debt‑reaffirmation statute), the remedy is usually expectation damages—the full amount promised—subject to reasonableness:

• The promised amount should not be grossly disproportionate to the benefit received. A promise to pay a rescuer $1 million for saving a wallet might be cut down or denied, even under the material benefit rule.

Where the theory is promissory estoppel, the default remedy is reliance, though full enforcement is sometimes allowed.

Comparing Remedies: Expectation, Reliance, Restitution

Questions on this topic often test not just whether some obligation exists, but how to measure recovery. A quick comparison:

• Expectation (benefit of the bargain)

  • Standard in valid contracts.
  • Aim: put the plaintiff where they would have been if the contract had been performed.
  • May include lost profits if proven with reasonable certainty.

• Reliance:

  • Standard in many promissory estoppel cases and some contract cases where expectation is hard to prove.
  • Aim: put the plaintiff where they would have been if the promise had never been made.
  • Includes expenditures and opportunity costs caused by reliance.

• Restitution:

  • Standard in quasi‑contract/unjust enrichment and sometimes as an alternative contract remedy.
  • Aim: strip the defendant of benefits received, not to compensate the plaintiff’s full loss.

Worked Example 1.10

Owner orally agrees to pay Builder $80,000 to build a garage on Owner’s land. The contract is unenforceable under the Statute of Frauds. Builder spends$30,000 on labor and materials and completes half the work before Owner repudiates and hires someone else. Builder sues. What is Builder most likely to recover?

Answer:
Builder cannot enforce the contract price due to the Statute of Frauds, but Builder can recover in restitution for the reasonable value of the benefit conferred on Owner. If the half‑finished garage is worth about $30,000 to Owner, that figure is a likely recovery. Builder is not entitled to the expected profit on the full$80,000 contract, because the contract itself is unenforceable.

If the half‑finished structure is worth less than Builder’s costs (say, only $20,000 in market value), Builder may still recover the reasonable value of services, which in many cases is measured by cost. The precise formula can vary, but the MBE will signal whether the focus is on Owner’s enrichment or Builder’s cost.

Interactions Among Doctrines and Exam Strategy

In many MBE questions, more than one doctrine could appear in an answer choice. To choose correctly, use a structured approach.

1. Check for a Bargain First

Ask:

• Did the parties exchange promises or performances in a way that fits consideration?

If yes:

• Treat it as a contract case.
• Expect expectation damages as the standard remedy.
• Do not reach for promissory estoppel or quasi‑contract unless the contract is unenforceable for some reason (e.g., SoF).

Answer choices invoking promissory estoppel or quasi‑contract in a straightforward bargain situation are often distractors.

2. If Consideration Is Missing, Classify the Problem

• Promise + reliance → think promissory estoppel.
• Benefit conferred + no promise → think quasi‑contract / restitution.
• Promise about a barred or discharged debt → think moral obligation / debt exceptions.
• Promise after receiving a material benefit → consider the material benefit rule if indicated as a minority rule.

3. Match Remedy to Doctrine

• Valid contract → expectation (benefit of the bargain), with possible use of reliance or restitution as alternative measures.
• Promissory estoppel → usually reliance; occasionally limited expectation.
• Quasi‑contract → restitution only (reasonable value of the benefit).
• Promissory restitution / material benefit → expectation to the extent of the promise, subject to proportionality.

4. Distinguish Quasi‑Contract from Implied‑in‑Fact Contract

• If the fact pattern shows a course of dealing, prior similar transactions, or conduct clearly indicating agreement on price and performance, think contract, not quasi‑contract.
• If the fact pattern emphasizes mistake, emergency, or an unenforceable agreement, and the plaintiff sues for the value of services, think restitution.

5. Watch for Officious Intermeddlers

A common trap:

• A neighbor mows your lawn unasked and then demands payment. Unless you requested or knowingly accepted under circumstances suggesting payment, there is no restitution.

By contrast:

• Emergency medical services, mistaken improvements where the owner knows of the mistake and remains silent, or payments made under a clear clerical error are not officious intermeddling and often give rise to restitution.

Key Point Checklist

This article has covered the following key knowledge points:

• Obligations can sometimes be enforced even without traditional bargained‑for consideration.
• Promissory estoppel requires: (1) a clear promise, (2) reasonably foreseeable reliance, (3) actual detrimental reliance, and (4) injustice absent enforcement.
• Promissory estoppel usually yields reliance damages, but expectation‑like damages may be awarded where justice requires and reliance is hard to quantify.
• Quasi‑contract (implied‑in‑law contract) is not a true contract; it exists solely to prevent unjust enrichment in the absence of agreement.
• Quasi‑contract requires: (1) a benefit conferred, (2) a reasonable expectation of payment, (3) knowledge and acceptance/retention, and (4) circumstances making non‑payment unjust.
• The remedy in quasi‑contract is restitution, measured by the reasonable value of the benefit or the amount of enrichment, not the plaintiff’s full expectation.
• Officious intermeddlers and pure volunteers generally cannot recover in restitution.
• Past consideration and bare moral obligation ordinarily do not make a promise enforceable.
• Under the material benefit rule (minority), a promise made in recognition of a significant prior benefit may be enforceable (promissory restitution) to the extent necessary to prevent injustice.
• Promises to pay debts barred by the statute of limitations or discharged in bankruptcy can be enforceable without new consideration, usually to the extent of the new promise.
• Charitable subscriptions may be enforced through promissory estoppel (where there is reliance) or, in some jurisdictions, as binding promises without proof of reliance.
• Expectation, reliance, and restitution are distinct measures of recovery; matching the remedy to the doctrine is essential on the MBE.
• On the MBE, always distinguish between contract, promissory estoppel, and quasi‑contract, and select the doctrine (and remedy) consistent with the fact pattern.

Key Terms and Concepts

• Consideration
• Promissory Estoppel
• Detrimental Reliance
• Quasi‑Contract
• Unjust Enrichment
• Restitution
• Reliance Damages
• Expectation Damages
• Moral Obligation
• Material Benefit Rule
• Officious Intermeddler
• Implied‑in‑Fact Contract
• Past Consideration
• Quantum Meruit
• Promissory Restitution
• Charitable Subscription