Legal Definitions - reliance

Reliance, in a legal context, describes a situation where one person reasonably trusts and acts upon a statement, promise, or action made by another person or company. This trust and the subsequent action are significant because if the statement or promise turns out to be false or unfulfilled, and the relying person suffers harm as a result, there may be legal consequences for the person who made the original statement or promise.

Here are some examples to illustrate the concept of reliance:

• Example 1: Business Contract

  A small custom furniture maker receives a large order for unique pieces. To fulfill this order, they need a specific type of rare wood. A timber supplier assures the furniture maker that they have the wood in stock and can deliver it by a certain date. Based on this assurance, the furniture maker turns down other potential orders and begins designing the custom pieces, incurring initial costs. If the timber supplier then fails to deliver the wood as promised, the furniture maker has *relied* on the supplier's statement, acted upon it (by turning down other work and incurring design costs), and suffered a detriment (lost business, wasted design effort).

• Example 2: Employment Offer

  Maria receives a written job offer from "Tech Solutions Inc." for a senior software engineer position, including a start date and salary. Based on this firm offer, Maria resigns from her current job, gives two weeks' notice, and declines a competing job offer from another company. If Tech Solutions Inc. then retracts their offer just days before her start date, Maria has *relied* on their promise of employment, acted upon it (by quitting her old job and declining another), and suffered a detriment (she is now unemployed with no immediate prospects).

• Example 3: Consumer Services

  A homeowner hires a landscaping company to install a new irrigation system. The company representative explicitly states that the system will be fully operational and covered by a comprehensive two-year warranty. Based on this assurance, the homeowner pays a significant deposit and foregoes getting quotes from other companies that offered similar services with shorter warranties. If the irrigation system fails within a few months and the company refuses to honor the warranty or fix the issues, the homeowner has *relied* on the company's statements about the system's functionality and warranty, acted upon it (by paying the deposit and choosing this company), and suffered a detriment (a non-functional system and potential repair costs).