W.R. Grace & Co. v. Taco Tico Acquisition Corp.

Taco Tico (plaintiff) and Del Taco (defendant) signed a non-binding letter of intent for Taco Tico to acquire Del Taco, expressly stating neither party would be legally bound until a formal agreement was executed, regardless of any representations made; they also signed a management agreement letting Taco Tico manage Del Taco for a nominal fee during negotiations. Both sides were represented by experienced businessmen advised by counsel. When Taco Tico proposed terms departing from the letter of intent, Del Taco called off the deal and terminated the management agreement. Taco Tico sued for fraud, rescission, promissory estoppel, and quantum meruit; the jury rejected the fraud and rescission claims but awarded damages on promissory estoppel and quantum meruit, and the trial court denied Del Taco's motion for a directed verdict on those claims.

Whether promissory estoppel applies if the promisee could not reasonably rely on the promisor's representations.