For most of legal history, courts treated contractual promises as enforceable only when supported by "consideration" — something of value exchanged between the parties. This doctrine, inherited from English common law, served a dual purpose: it distinguished binding agreements from gratuitous promises, and it provided courts with an objective measure of mutual assent. Critics have long argued, however, that the consideration requirement is both under-inclusive and over-inclusive. It is under-inclusive because it sometimes withholds enforcement from promises that the parties clearly intended to be binding, as when a business executive promises a longtime employee a pension after decades of loyal service. It is over-inclusive because nominal or sham consideration — a dollar exchanged purely as a legal formality — satisfies the doctrine even when no genuine bargain has occurred.

In response to these criticisms, the Restatement (Second) of Contracts introduced the doctrine of promissory estoppel, which provides that a promise is enforceable without consideration if the promisor should reasonably have expected the promise to induce action or forbearance by the promisee, and if injustice can be avoided only by enforcement. Courts applying promissory estoppel often limit recovery to reliance damages — the costs the promisee actually incurred in relying on the promise — rather than expectation damages, which would put the promisee in the position she would have occupied had the promise been fully performed.

Scholars debate whether promissory estoppel truly displaces consideration or merely supplements it. Some argue that the doctrine, by tying enforceability to detrimental reliance, preserves the core insight that courts should enforce promises when parties have genuinely committed themselves. Others contend that extending enforcement to non-bargained promises fundamentally undermines the voluntary, exchange-based model that makes contract law coherent.