Detrimental reliance refers to a court order for a party to fulfill their obligations in a contract as failing to do so would have a huge negative effect on the affected party who took action based supposedly factual information.

Nonperformance can lead to the victim facing a catastrophic financial predicament.

While these method of recourse is a deterrent against rouge business operators, it can also be a focal point when mistakes are made.

For example in the financial industry, a borrower might request from a lender to know the balance amount owing for a home loan or personal loan and be informed of it being $10,000. Thinking that the sum of money was pretty small, he quit his job, sold his valuable collection of art to raise that money as paying off the balance would help him save on interest costs.

Upon sending the payment to the bank, he was informed that the balance amount was actually $25,000. He might then seek the help of the court as he had detrimental reliance on the untrue material information which the lender provided.

In other words, a mistake in representation of a party is insufficient to claim detrimental reliance. Actions taken due to that information that would make a huge detrimental impact on the victim if the not honored, must be present.

It must be said that the party which makes these mistake must be one that is fully reliant on not making such mistakes.

This will also have legal basis should a failure to act is present due to the wrong information.