Detrimental Reliance

This refers to a promise being made. The term is typically used when a promise or obligation is not kept and relying on the promise was a reasonable decision on the part of the reliant person. This is often an issue discussed in regard to oral contracts. For example, imagine that a client promises a small business owner pays for a service but once the services are rendered, the client refuses to pay. The business owner would have to prove that he had every reason to believe the promise, that he is being harmed by the lack of payment and that he is being treated unjustly. He relied on the client to pay him for a few months’ work and now he is in financial trouble because the client did not pay. That was detrimental to his business and to his livelihood.