John, a small business owner, has run a successful bakery for years. Looking to expand, he
decides to open a new location. To fund the construction, John approaches his local bank,
where he has had a long-standing relationship. During a meeting with the bank manager, the
manager verbally assures John that his loan application will be approved, citing their positive
business history. Relying on this promise, John begins construction on the new bakery,
investing significant resources and even signing contracts with contractors and suppliers.
However, when John formally submits his loan application, the bank denies it, citing newly
implemented policy changes that make him ineligible for the loan. John is now in a difficult
financial situation, as he has already committed to the expansion based on the bank manager's
promise. The unexpected denial leaves John unable to cover the construction costs, putting
his entire business at risk.
Can John legally challenge the bank’s decision using the Doctrine of Promissory Estoppel?
What are the potential outcomes if John decides to take the bank to court?
