Claudia Aceves borrowed $845,000 from U.S. Bank to buy a home. Less than two years into the loan, she could no longer afford the monthly payments. The bank notified her that it planned to foreclose on her home. (Foreclosure is a process that allows a lender to repossess and sell the property that secures a loan.) The bank offered to modify Aceves’s mortgage if she would forgo bankruptcy. In reliance on the bank’s promise, she agreed. Once she withdrew the filing, however, the bank foreclosed and began eviction proceedings. Aceves filed a suit against the bank for promissory estoppel. Could Aceves succeed in her claim of promissory estoppel?
Claudia Aceves borrowed $845,000 from U.S. Bank to buy a home. Less than two years into the loan, she could no longer afford the monthly payments. The bank notified her that it planned to foreclose on her home. (Foreclosure is a process that allows a lender to repossess and sell the property that secures a loan.) The bank offered to modify Aceves’s mortgage if she would forgo bankruptcy. In reliance on the bank’s promise, she agreed. Once she withdrew the filing, however, the bank foreclosed and began eviction proceedings. Aceves filed a suit against the bank for promissory estoppel. Could Aceves succeed in her claim of promissory estoppel?
Yes, Aceves will succed in her claim.
Promisory estoppel refers to the condition that a promise is enforceable even if there is no formal consideration. This arises when the promisor has made a promise to the promisee who acts on the basis of that promise. In the given scenario, Aceves has acted on the basis of the promise made by the Bank and withdrawn her filing. The important condition that the promisee should have relied on the promisor is hence fulfilled in this case.
The consition of promissory estoppels is based on the principles of justice and fairness. The act of the Bank has been unfair to Aceves due to which the prmise should be binding on the bank since the client acted on the basis of the promise. Hence Aceves will succeed in her claim.
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