Reference no: EM13887994

summary this case and evaluate about 150 words.

Brits Rescued by Promissory Estoppel

FACTS: Portman Lamborghini, Ltd. (Portman), was owned by Chaplake Holdings, Ltd., a United Kingdom company, which was owned by David Jolliffe and David Lakeman as equal shareholders. Between 1984 and 1987, Portman sold approximately 30 new Lamborghinis each year through its exclusive concession contract with the car maker. It was then the largest Lamborghini dealer in the world since Lamborghini's production was just 250 cars per year. These cars sold at a retail price between $200,000 and $300,000. In 1987, Chrysler Corporation bought Lamborghini, and its chairman, Lee Iacocca, presented a plan to escalate production to 5,000 units within five years. The plan included the introduction of a new model, the P140, with a retail price of $70,000. Between 1987 and 1991, all of the Chrysler/ Lamborghini top executives with whom Jolliffe and Lakeman and their top advisors came in contact provided the same message to them: Chrysler was committed to the Expansion Plan, and in order for Portman to retain its exclusive U.K. market, it must expand its operational capacity from 35 cars in 1987 to 400 cars by 1992. Accordingly, Portman acquired additional financing, staff, and facilities and built a new distribution center. An economic downturn in the United States and major development and production problems at Lamborghini led Chrysler to reduce its expansion investment by two-thirds. Factory production delays eroded Portman's profitability and success, and it entered into receivership in April 1992. Suit was brought on behalf of the Portman and Chaplake entities on a promissory estoppel theory against Chrysler, a Delaware corporation.

DECISION: Judgment for Portman and Chaplake on the promissory estoppel theory. (1) A promise was made by Chrysler that the Lamborghini line would expand tenfold and that Portman would retain its exclusivity deal only if it expanded its operational capacity. (2) The promisor, Chrysler, should have reasonably expected that Portman would rely on this promise. (3) Lakeman and Jolliffe were given the same message and promise by all of the top executives involved, and it was therefore not unreasonable for them to rely upon the promises made by these executives and to undertake the detriment of major expansion activity that would have been unnecessary but for the Expansion Plan and the role they were promised. (4) The prevention of injustice is the "fundamental idea" underlying the doctrine of promissory estoppel, and injustice can be avoided in this case only by the enforcement of Chrysler's promise. Portman is entitled to £ 569,321 for its costs to implement its Expansion Plan, and Chaplake is entitled to £ 462,686 for its investment in Portman's expansion. [Chrysler Corp. v Chaplake Holdings, Ltd. 822 A2d 1024 (Del 2003)]