This case involves conditional promises, recovery of lost profits from a nonexistent business, sufficiency of the evidence as to those lost profits, and promissory estoppel.
Petitioner Old National Bank (ONB) challenges a Court of Appeals decision affirming a $295,000 jury verdict in favor of Farm Crop Energy, Inc. See Farm Crop Energy, *925Inc. v. Old Nat'l Bank, 38 Wn. App. 50, 685 P.2d 1097 (1984). We granted discretionary review, reverse, and remand for new trial.
In 1980, 10 investors incorporated Farm Crop to build a fuel alcohol plant in Royal City, Washington. The investors envisioned a plant that would produce 1 million gallons of fuel-grade alcohol per year from grain screenings readily available as a byproduct of wheat harvesting. The investors planned to sell on the open market the fuel produced. Farm Crop contacted ONB to discuss financing for the project.
In December 1980, Farm Crop submitted a plant feasibility study to an ONB commercial lending officer, Dan Danelo. Although Danelo expressed interest in the project, ONB initially rejected Farm Crop's loan request because the company hired by Farm Crop to construct the plant, Alcohol Equipment Corporation, had never built a fuel alcohol plant.
Subsequently, ONB agreed to reconsider Farm Crop's loan application if Farm Crop could find a company that had built an operating fuel alcohol plant to build the one proposed by Farm Crop. Farm Crop soon reached a tentative agreement with Matrix Energy Company to have Matrix build the plant. Farm Crop president Hugo Van Binsbergen introduced Danelo to Paul Petersen of Matrix. Although Matrix had been only recently formed, Petersen had built fuel alcohol plant similar to the one proposed by Farm Crop.
Upon reconsideration, ONB approved Farm Crop's loan application. On February 19, 1981, ONB issued a commitment letter in which it agreed to lend Farm Crop $1,475,000 subject to certain terms and conditions. Among other conditions, ONB required personal guaranties from Farm Crop investors, some limited and some unlimited. ONB also required Farm Crop to obtain a $500,000 guaranty from the Small Business Administration (SBA) as a condition of the loan.
The SBA agreed to provide the necessary guaranty if Farm Crop could satisfy certain additional conditions, *926including unlimited personal guaranties by all Farm Crop investors. The SBA also required Farm Crop to execute contracts both to purchase grain screenings and to sell the alcohol produced by the plant in its first operating year.
From February through May 1981, Danelo and Farm Crop worked together to satisfy the loan conditions imposed by ONB and the SBA. At one point, when the SBA required Farm Crop investors to provide cash and collateral for the loan, Danelo approved of one investor's plan to pay an increased amount of cash in return for another investor's pledge of increased collateral.
In May 1981, Matrix told the Farm Crop investors that Farm Crop could realize substantial tax savings and take advantage of favorable discounts by immediately advancing $175,000 to Matrix for construction costs. Farm Crop investors met with Danelo on May 28, 1981, to discuss the proposal by Matrix. Several investors testified at trial that Danelo assured them that the ONB loan would go through. Another investor testified that Danelo reminded the investors that ONB would fund the loan only if Farm Crop satisfied the conditions. Danelo testified that he reminded the investors of the ONB and SBA conditions and left the decision whether to advance the money to Matrix solely to the Farm Crop investors.
The next day, Farm Crop advanced $175,000 to Matrix. Several investors testified that the advance was made based on Danelo's assurance that ONB would fund the loan.
Danelo testified that on June 3, 1981, he learned for the first time that Farm Crop could not obtain a contract to purchase grain screenings as required by the SBA for its guaranty without a $500,000 letter of credit. Danelo further testified that on June 9, 1981, he was told that three Farm Crop investors refused to sign unlimited guaranties. One of the investors later testified he was reluctant to sign, but ultimately would have signed. Another investor testified that he refused to sign on the basis of Danelo's agreement to allow him to give additional cash in lieu of collateral, which another investor promised to pledge in his stead.
*927On June 10, 1981 ONB revoked its loan commitment, contending that Farm Crop had failed to comply with the requisite conditions. In October 1981, Farm Crop filed suit against ONB alleging breach of contract and promissory estoppel. After tried, the jury returned a general verdict in favor of Farm Crop for $295,000. The trial court denied ONB's motion for new trial. ONB appealed; the Court of Appeals affirmed. We granted discretionary review. ONB's petition raises two issues: (1) did the trial court err in allowing the jury to consider lost profits? and (2) did the trial court err in failing to instruct on the effect of a conditional noncontractual promise?
I
ONB challenges the trial court's instructions allowing the jury to consider lost profits as part of its damage award. See instruction 11, Clerk's Papers, at 126. ONB contends that in an action for promissory estoppel, damages award-able should be limited to those incurred in reliance on the alleged promise, here the $175,000 advanced by Farm Crop to Matrix. Alternatively, ONB argues that even if lost profits can be recovered in promissory estoppel cases, here the trial court erred in submitting the issue of lost profits to the jury because there was lacking substantial and sufficient evidence upon which a jury verdict as to anticipated profits could be based. Because we agree that under the facts of this case the issue of lost profits should not have been presented to the jury on any theory, we do not address the question whether lost profits are recoverable in promissory estoppel cases generally.
In Larsen v. Walton Plywood Co., 65 Wn.2d 1, 16, 390 P.2d 677, 396 P.2d 879, 32 A.L.R. 125 (1964), this court stated:
The usual method of proving lost profits is from profit history. It is argued that where a plaintiff is conducting a new business with labor, manufacturing and marketing costs unknown, prospective profits cannot be awarded. This is the so-called new business rule and has long been the law of Washington. Engstrom v. Merriam, 25 Wash. *92873, 64 Pac. 914 [(1901)]; Webster v. Beau, 77 Wash. 444, 137 Pac. 1013 [(1914)]; Andreopulos v. Peresteredes, 95 Wash. 282, 163 Pac. 770 [(1917)]; Lockit Cap Co. v. Globe Mfg. Co., 158 Wash. 183, 290 Pac. 813 [(1930)]; Hole v. Unity Petroleum Corp., 15 Wn. (2d) 416, 131 P. (2d) 150 [(1942)]; Ingersol v. Seattle-First Nat. Bank, 63 Wn. (2d) 354, 387 P. (2d) 538 [(1963)].
In Larsen, the court noted that the new business rule should not bar recovery of lost profits when a reasonable estimation of damages can be made through analysis of market conditions and a profit showing of identical or similar businesses in the vicinity, operating under substantially the same conditions. Larsen, at 17. The court concluded that expert testimony could alone form a sufficient basis for an award of lost profits. Larsen, at 17, 19. The court cautioned, however, that
Although expert testimony is a sufficient basis for an award of lost profits, their [sic] opinions must be based upon tangible evidence rather than upon speculation and hypothetical situations. Bogart v. Pitchless Lbr. Co., [72 Wash. 417, 130 Pac. 490 (1913)] supra. Consequently, our judicial concern is limited to the question: Was there a substantial and sufficient factual basis upon which the respective opinions could be based? Warner v. Channell Chemical Co., 121 Wash. 237, 208 Pac. 1104 [(1922)].
Larsen, at 19.
We note that the proposed fuel alcohol plant from which the anticipated profits were to flow was not built. None of the officers or investors in Farm Crop had built or operated a similar plant. Farm Crop relied solely on expert testimony at trial to substantiate its claim for lost profits. The expert was Paul Christensen, president of Matrix Energy Company, the company hired by Farm Crop to build the plant. Our analysis here focuses on the question whether Farm Crop's expert's testimony was based upon substantial and sufficient facts to support an award of lost profits instruction.
Prior to forming Matrix, Christensen worked as a bank loan officer and raised venture capital; both activities were *929unrelated to the industry in question. He had been in charge of purchasing and traffic for an unrelated enterprise.
In his words, Christensen "did a lot of study and work on alcohol." He subscribed to two trade journals, one of which was untitled. Verbatim Report of Proceedings, at 722-23. As to whether this was a profitable industry, he said, "I'm sure that it's been a profitable operation ... or else they [three existing plants] wouldn't still be in existence producing the alcohol." Verbatim Report of Proceedings, at 733.
The only other plant Christensen was involved with had been shut down just before trial and was expected to be down for a couple of months. He was familiar with five other Northwest plants, four of which were operating. One was operated with wood pulp as its raw material, not grain screenings as proposed here, another operated with brewer's waste, and the others were either shut down or he did not know their status.
Christensen testified in generalities, without dollar amounts or percentages, as to construction and operation costs. Additionally, he made certain assumptions about time and costs of construction, expenses of production, and sales. He assumed an annual output of 1 million gallons. No Northwest plant of which he was aware had ever produced such amount in a year. As to the raw materials being available for the full year, he stated, "as far as supply, I wasn't totally familiar with the suppliability. ... I would assume there was [an] adequate supply." Verbatim Report of Proceedings, at 784.
Christensen not only predicted profits for the first year's operation from this nonexistent plant, he speculated about future profits thereafter. His candor is revealing: "Oh. Yes, I suspect they would continue earning those profits." (Italics ours.) Further, "you have several variable factors that go in there which are fairly hard to predict." Verbatim Report of Proceedings, at 823.
The witness based all of his anticipated profit projections, a pro forma analysis, upon production of 1 million *930gallons in the first year. He made no analysis of predicted profits at a lesser rate of production.
Q. So what you are testifying here today is that if everything works right, and we get a million gallons; then this is what your opinion is?
A. That's correct.
Q. And . . . making a pro-forma is nothing [other] than an uneducated judgment?
A. That is correct.
Q. . . .You can't say this plant ran one year, and this is what its cost[s] were, and this is what it produced?
A. Right.
Verbatim Report of Proceedings, at 844-45.
Christensen's projected profit figure of $738,500 did not take into account $400,000 in debt service. Also, while he projected a production of 75 gallons per ton of raw material, his actual experience was that only 30 gallons per ton were produced.
Other relevant testimony by Christensen bears directly upon the main issue.
Q. First of all, all of these numbers are not based on experience in an actual existing plant producing one million gallons of alcohol; are they?
A. Give me your question again. Let me think of that.
Q. This number, net profit before taxes, you can't point me to a single plant and say that's what this plant earned last year; can you?
A. No. Because I don't have those records available to me. There are plants out there producing a million gallons.
Q. You don't know what their profitability is?
A. Yes, that is correct.
Q. You don't know if they are debt fixed or if they are fixed by capital investments.
A. Right.
Q. Now, you see we are trying to stretch things out in the future; and he has asked you if you subtract this, you should get $336,390. Again you haven't made any projection as to what it would have been. Instead of a million, we write 750,000; have you?
A. No, I haven't.
Q. So in order for anyone to believe that this figure is *931correct, they have to believe that this plant would have turned out a million gallons?
A. That's correct.
Q. It didn't turn out a million gallons, and that figure is incorrect.
A. Correct.
Verbatim Report of Proceedings, at 902-03.
To summarize, the opinion as to anticipated profits came from a former bank employee who had no technical knowledge of ethanol plants. He based his entire projection of profits upon a plant producing 1 million gallons in its first year of operation. He knew of no plant in the three northwestern states that had such a production record. He knew nothing of their profitability. The only plant with which he was associated had never produced that level. In fact, it was shut down after being plagued with numerous production problems, all of which he assumed would be solved in the plaintiff's unbuilt plant. He never calculated profits based upon a production less than his assumed 1 million gallons. He candidly admitted that his pro forma estimate of future profits was "an uneducated judgment.”
Applying the Larsen test, we conclude that here there was no substantial and sufficient basis upon which Christensen based his "expert" testimony regarding Farm Crop's lost profits. Here, the jury was not presented with evidence based on market conditions and profit showings of identical similar business in the vicinity, operating under substantially the same conditions. See Larsen, at 17. None of the criteria identified in Larsen as justifying a departure from the new business rule are present here. Christensen's testimony here did not depart from the realm of uncertainty and speculation so as to support an award of lost profits. See Larsen, at 17.
We hold that the new business rule bars recovery of lost profits here under either a contract or promissory estoppel theory. The trial court erred in submitting the issue of lost profits to the jury.
*932II
Next, ONB argues that the trial court erred by failing to instruct on the effect of a conditional promise as the basis for a promissory estoppel award. Here, the trial court's instructions could have allowed damages based either upon ONB's breach of its written loan commitment, or damages based upon a theory of promissory estoppel arising from Danelo's May assurance, or a combination of both theories. Under instruction 8, the jury could find ONB liable for revoking its loan to Farm Crop if (1) it found that Farm Crop complied with, or was in the process of complying with, the loan conditions within the time allowed for compliance, or if (2) the jury found that ONB had waived or was estopped from asserting Farm Crop's noncompliance with the loan conditions. See instruction 8, Clerk's Papers, at 123. If the jury found that ONB had breached its loan commitment under this instruction, the jury would not need to resort to promissory estoppel for its award. On the other hand, if the jury found that ONB had not breached its commitment because Farm Crop failed to satisfy the conditions, then the jury should not have awarded Farm Crop any damages based on the loan commitment. However, even if the jury found that Farm Crop failed to perform the conditions and thus that ONB was not liable for its revocation of the loan, the jury could still find that Farm Crop changed position in reliance on the May assurance and award damages pursuant to a promissory estoppel theory.1 As noted by the Court of Appeals below, "the letter of loan commitment cannot be the basis of promissory *933estoppel." Farm Crop Energy, at 53.
Nevertheless, ONB argues that Danelo's May assurance was also conditional and that the court should have instructed the jury pursuant to Restatement (Second) of Contracts § 91 (1981) which reads:
If a promise within the terms of §§ 82-90 [enforceable but not supported by consideration] is in terms conditional or performable at a future time the promisor is bound thereby, but performance becomes due only upon the occurrence of the condition or upon the arrival of the specified time.
See also Corbit v. J.I. Case Co., 70 Wn.2d 522, 424 P.2d 290 (1967).
Here, Danelo testified that he told Farm Crop investors at the May meeting that he did not want to make any decision for them and that in order to get the loan Farm Crop still had to meet the conditions of the written loan commitment. Verbatim Report of Proceedings, at 1078. One Farm Crop investor backed up Danelo's version:
Q. . . . I understood you to say that Mr. Danelo told you that commitments had to be met?
A. I am sure he stated that to — several times to me.
Q. You have to meet the conditions before you go ahead ... go ahead but you have to meet the conditions?
A. Right.
Verbatim Report of Proceedings, at 254.
Farm Crop does not dispute that ONB produced evidence of the conditional nature of the May assurance. Instead, Farm Crop contends that the court's instructions as a whole were sufficient as given.
Instructions are sufficient if they permit each party to argue his theory of the case, are not misleading, and when read as a whole, properly inform the trier of fact of the applicable law. Crossen v. Skagit Cy., 100 Wn.2d 355, 360, 669 P.2d 1244 (1983). Here, because of the trial court's *934failure to instruct the jury on the effect of a conditional noncontractual promise, ONB was unable to argue its theory that because the conditions were not satisfied so as to create a binding contract under the written loan commitment, they similarly were not satisfied so as to create liability under Farm Crop's promissory estoppel theory based on Danelo's May assurance. Moreover, when read as a whole, the instructions did not make clear that the conditional nature of the loan commitment as set forth in instruction 8 (breach of contract instruction) also could have affected the promissory estoppel promise set forth in instruction 9. Thus, the trial court failed to inform the jury of the applicable law.
We conclude that ONB was entitled to an instruction on the effect of a conditional noncontractual promise as stated in Restatement (Second) of Contracts § 91 (1981).
The decision of the Court of Appeals is reversed insofar as it is inconsistent with our determination of the issues raised by the petition. The case is remanded to the trial court for a new trial.
Pearson, C.J., and Utter, Dolliver, Andersen, and Goodloe, JJ., concur.
Instruction 9 provides: "If you find that Old National Bank made a promise which it reasonably expected to cause Farm Crop Energy, Inc. to justifiably change its position, and which promise did cause Farm Crop Energy, Inc. to justifiably change its position, then the Old National Bank is liable to Farm Crop Energy, Inc. for all damages reasonably caused by the promise made and relied upon." Clerk's Papers, at 124.
We note that a preferable instruction would have been based on Restatement (Second) of Contracts § 90(1) (1981):
"A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce *933such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires."