## Facts

- Local distributors for Emerson Radio in the District of Columbia encouraged a business to apply for an Emerson dealer franchise.
- The distributors represented that the application had been accepted, that a franchise would be granted, and that the business would receive an initial delivery of 30–40 radios.
- With the distributors’ knowledge and encouragement, the prospective dealer hired salesmen, advertised, and solicited orders in preparation to sell Emerson radios.
- The prospective dealer incurred about $1,150 in out-of-pocket expenses in reliance on the assurances.
- No radios were delivered, and the prospective dealer was ultimately told the franchise would not be granted.

## Issues

1. Whether the distributors could be held liable under estoppel principles for inducing detrimental reliance despite the absence of a proven, enforceable franchise contract.
2. Whether recovery under estoppel could include anticipated profits or was limited to reliance expenditures.

## Decision

- The court held the distributors liable under estoppel principles because their assurances and conduct induced foreseeable reliance that caused loss.
- The court affirmed the award of $1,150 in reliance expenditures.
- The court disallowed $350 in anticipated profits, limiting damages to out-of-pocket losses.
- Judgment affirmed as modified (damages reduced from $1,500 to $1,150).

## Legal Principles

- A party who, by words or conduct, induces another to reasonably and detrimentally rely may be estopped from denying the assurance when justice and fair dealing require protection of the relying party.
- Estoppel-based liability may arise even if no enforceable contract is proven; the focus is the promise (or assurance), knowledge of reliance, and resulting detriment.
- The usual measure of recovery in this setting is reliance damages: expenditures and losses incurred because of the assurance.
- Anticipated profits are not recoverable where the remedy is limited to compensating reliance rather than granting the benefit of an unconsummated bargain.

## Conclusion

The court imposed estoppel liability for inducing detrimental reliance on assurances of a dealership and supply of goods, but limited the remedy to reimbursement of reliance expenses rather than expected profits.


Goodman v. Dicker, 169 F.2d 684 (D.C. Cir. 1948)