Hoffman v. Red Owl Stores, Inc. case brief

Hoffman v. Red Owl Stores, Inc.; (Sup. Ct. of WI, 1965); CB 298; Notes 39

• Facts: an agent from D had been in negotiations with P to provide P with a franchise of Red Owl for 18K, the price kept going up; P sold bakery and store for capital for the transaction, and purchased an option for a plot of land; D then did not extend franchise to P; P sues for breach of K.
• Holding: Court says no contract b/c neither party reasonably thought they’d arrived at an agreement, only preliminary negotiations. the court held that there was detrimental reliance; Court says §90 implicated here. Remedying misbehavior, tort reliance.
• Commentary: 3 conditions for §90:
  • Promisor should reasonably expect to induce action D making promises, representations in taking preliminary steps, opening small grocery store, property, etc.
  • Did promise result in action taken by promisee? Court says Yes
  • Injustice? Court says yes.