Historical Cases from Attorney Richard Clem: Hoffman v. Red Owl Stores, Inc., 26 Wis. 2d 683, 133 N.W.2d 267 (1965).

Hoffman v. Red Owl Stores, Inc., 26 Wis. 2d 683, 133 N.W.2d 267 (1965), is a frequently-cited 1965 case of the Wisconsin Supreme Court in which the Court adopted the doctrine of Promissory Estoppel, as earlier set forth in Section 90 of the Restatement of Contracts, which allows for relief if the plaintiff can establish the following elements:

1. The promise must be one which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee.
2. The promise must actually induce that action or forbearance.
3. Injustice can be avoided only by enforcement of the promise.

The court held that the facts of the case met these tests. Therefore, it affirmed the verdict in favor of the plaintiff. However, it also limited the damages that could be awarded, and remanded the case since the damages had not met the proper legal tests.

The case arose from Hoffman's negotiations to open a Red Owl store in Wisconsin. At some point, Red Owl promised him that he could be established in a store for $18,000. He sold his existing store and purchased a lot for $1000, but Red Owl then informed him that the $18,000 had gone up to $24,100. He was later told that that figure would increase by $2000, after which the deal would go through. He was told that the final step was selling his existing bakery, after which the deal would go through.

The deal never went through, however, and Hoffman sued. The Supreme Court noted that the issue of promissory estoppel was squarely presented, since there was no other theory under which Hoffman could prevail.

The case is frequently included in American law school casebooks, and is frequently cited by the courts. For example, it was recently cited in Ultratec, Inc., v. Sorenson Communications, Inc., 707 F.3d 702 (7th Cir. 2013).

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Richard P. Clem is an attorney and continuing legal education (CLE) provider in Minnesota. He has been in private practice in the Twin Cities for 25 years. He has a J.D., cum laude, from Hamline University School of Law in St. Paul and a B.A. in History from the University of Minnesota. His reported cases include: Asociacion Nacional de Pescadores a Pequena Escala o Artesanales de Colombia v. Dow Quimica de Colombia, 988 F.2d 559, rehearing denied, 5 F.3d 530 (5th Cir. 1993), cert. denied, 510 U.S. 1041 (1994); LaMott v. Apple Valley Health Care Center, 465 N.W.2d 585 (Minn. Ct. App. 1991); Abo el Ela v. State, 468 N.W.2d 580 (Minn. Ct. App. 1991).

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