Also known as: material changes of position · change of position
Written by attorneys · grounded in primary & secondary sources — see below
A substantial alteration in a party's circumstances or commitments made in reasonable reliance on a promise or agreement. The change must be material enough that enforcing the original terms would produce injustice. Courts consider the foreseeability of the reliance and the extent of the detriment incurred.
Point Rights and Apex Attorneys orally agreed to an extra $150,000 for handling an unexpected regulatory investigation. Point Rights then hired additional associates and turned down other matters. When Apex later refused the fee, the staffing changes constituted a material change of position that made enforcement of the oral promise just.
Majestic Construction and Millennium Media orally modified a services contract that fell within the Statute of Frauds. Millennium Media later sought to enforce the original terms. Because Millennium Media had made no material change of position in reliance on the oral modification, the prior contract remained unmodified.
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Marco Marquez and Maria Morales agreed orally that part of a duty under their enforceable contract need not be performed. Maria then restructured her operations around the new arrangement. Reinstatement of the original terms would be unjust because of Maria's material change of position in reliance on the subsequent agreement.
Matrix Technologies waived a delivery deadline in a goods contract. Monica Morgan then purchased specialized equipment and rearranged production schedules to meet the new timeline. The supplier's attempt to retract the waiver failed because Monica's material change of position made strict enforcement unjust.
Hoffman sold his grocery store and incurred expenses while preparing to open a new franchise location after Red Owl Stores promised financing. When Red Owl withdrew, Hoffman's expenditures and lost opportunities amounted to a material change of position. The court enforced the promise to the extent necessary to avoid injustice.
The change must involve concrete actions such as hiring staff, purchasing equipment, or restructuring operations that are both foreseeable and directly tied to the promise. Minor or easily reversible steps usually do not qualify. Courts examine the extent of the detriment and whether reinstatement of original terms would produce injustice.
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When a subsequent agreement is unenforceable under the Statute of Frauds, the prior contract is not modified unless the promisee has made a material change of position in reliance. The same reliance can also prevent reinstatement of original terms under related rules when enforcement would otherwise be unjust.
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A waiver affecting an executory portion of a contract may be retracted by reasonable notice unless retraction would be unjust in view of a material change of position in reliance on the waiver. The reliance must be substantial and foreseeable for the bar on retraction to apply.
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Knowledge is not always required, but the reliance must be reasonably foreseeable from the promisor's perspective. Courts focus on whether justice requires enforcement given the change of position rather than on actual notice of every specific action taken by the promisee.
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…necessarily mean Damages for breach. Moreover the amount allowed as Damages may be determined by the plaintiff’s expenditures or change of position in reliance as well as by the value to him of the promised performance. Restitution is also an ‘enforcing’ remedy, although it is often said to be based upon some kind of a rescission. In…