On October 22, an Idaho First National Bank loan officer orally agreed to loan Black Canyon Racquetball Club, Inc. around $174,000 at an interest rate of 13.75%, but that rate could be changed when the loan was made if the "market" interest rates changed.
This was to be a Small Business Administration loan to remodel the club. This loan would be made once the club sold 150 memberships. However, the types of memberships were not specified. The club offered full-single, fitness-only, racquetball only, corporate, and student memberships all at different membership costs. The club started the remodel and submitted two applications for a loan, both of which were denied because they did not meet the SBA’s requirements and the cash flow and projections were not believable. The club sued the bank on the theory of promissory estoppel. Define promissory estoppel, and tell why this theory will or will not favor the club.