A plaintiff sues a defendant for breach of contract in federal court. The court finds in favor of the defendant, ruling no valid contract existed. The plaintiff then sues the same defendant in state court, this time for promissory estoppel based on the same alleged promise. Which principle determines whether the state court is bound by the federal court's decision regarding the existence of the promise?
Issue preclusion, or collateral estoppel, prevents relitigation of a specific issue of fact or law that was actually litigated, determined, and essential to a valid final judgment. In this case, the federal court's finding that no promise existed was a specific issue essential to its judgment on the breach of contract claim. Therefore, issue preclusion bars the plaintiff from relitigating that specific factual issue in the state court proceeding. Claim preclusion, or res judicata, bars relitigation of an entire claim, including any legal theories that were or could have been brought. While the promissory estoppel action might also be barred by claim preclusion under the modern 'transactional' test (as it arises from the same set of facts as the contract claim), the principle that specifically addresses the binding effect of the federal court's factual finding on the promise is issue preclusion.
Ask Bash
Bash is our AI bot, trained to help you pass your exam. AI Generated Content may display inaccurate information, always double-check anything important.
What is the difference between claim preclusion and issue preclusion?
Open an interactive chat with Bash
What is the doctrine of promissory estoppel?
Open an interactive chat with Bash
Can the same issue be litigated in different courts without conflicting rulings?