Also known as: justifiable reliance · reasonable reliance
Written by attorneys · grounded in primary & secondary sources — see below
A change of position by one party in response to another's conduct or representation that is reasonable under the circumstances. The reliance must be foreseeable to the party whose conduct induced it and must be substantial enough that enforcement or liability is necessary to avoid injustice.
Jordan Jenkins owns the servient parcel subject to an easement held by Jarvis Aviation. Jordan builds a permanent hangar across the easement path after Jarvis has taken no steps to use or maintain it for years. Jarvis later demands restoration of the easement path. The court extinguishes the easement because Jarvis's inaction led Jordan to invest in the hangar under circumstances where the reliance was reasonable and foreseeable.
Jonathan Jaffe orally agrees to sell land to Joy Jiang. Joy pays part of the price and begins constructing a home on the parcel. Jonathan later refuses to convey title, citing the statute of frauds. The court orders specific performance because Joy's substantial construction expenditures were made in reasonable reliance on the continuing assent to the oral agreement.
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Jeanette Jensen permits Javier Jimenez to run a pipeline across her land. Javier installs the line and connects it to his processing plant at substantial cost. Jeanette later revokes permission. The court imposes a servitude because Javier substantially changed position in reasonable reliance on the belief that the permission would continue.
An officer obtains a search warrant from a neutral magistrate and executes it in good faith. The warrant is later held invalid for lack of probable cause. Evidence seized during the search is admitted at trial because the officer's reliance on the warrant was objectively reasonable.
June Jiang, a consulting engineer, negligently certifies that a bridge design meets safety standards. Jones Petroleum relies on the certification and begins construction. A worker is injured when the bridge collapses. Jones Petroleum recovers damages because its reliance on the certification was reasonable and caused the physical harm.
Jensen Farms obtains a written administrative interpretation from the state agency charged with enforcing a licensing statute. The interpretation states that the farm's operations do not require a permit. After the agency later reverses its position, the farm is prosecuted. The court dismisses the charge because the farm acted in reasonable reliance on the official statement.
Reliance is justified when the party could reasonably foresee that the other would substantially change position and the change is substantial enough that enforcement is required to avoid injustice. Courts examine whether the reliance was foreseeable and whether the relying party acted prudently under the circumstances.
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No. A party's failure to read a contract does not automatically render reliance unjustified. Courts still examine whether the reliance was reasonable under all the circumstances surrounding the misrepresentation or promise.
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Actual reliance requires only that the promisee changed position because of the promise. Justified reliance adds the requirement that the change of position be reasonable and foreseeable to the promisor so that injustice can be avoided only by enforcement.
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…not alone in holding that the trier of fact can infer an agreement to limit the grounds for termination based on the employee's reasonable reliance on the company's personnel manual or policies. (See, e.g., Robinson v. Hewlett-Packard Corp., supra, 183 Cal. App.3d at p. 1123 [promise not to terminate without good cause demonstrated…