What is Estoppel?
An estoppel is a legal means of preventing a party from taking action that will negate some previous action taken. It is a judicial instrument in common law legal frameworks through which a court can prohibit or “estop” an individual from making claims or from taking back his or her original statement; the individual being prosecuted is said to be “estopped.”
Estoppel can prohibit an individual from making specific claims. Estoppel theories are centered around both common law and equity.
For example, a lender and borrower are in court because of an unpaid debt. The lender says that he will pardon 50% of the debt. The judge can, therefore, issue an estoppel on the lender from going back on his word. Hence, he cannot change his mind and only pardon 30% of the existing debt.
Summary
- Estoppel is a legal means of preventing a party from taking action that will negate some previous action taken.
- Estoppel theories are centered around both common law and equity.
- The two most common types of estoppel in the U.S. are promissory estoppels and equitable estoppels.
Common Types of Estoppels in the U.S.
When looking at the U.S., two common types of estoppels are the promissory estoppel and the equitable estoppel.
1. Promissory estoppel
The promissory estoppel, which is frequently found in contract law, prevents an individual from changing their mind on a commitment or promise made, even though there is no legal agreement. It argues that an aggrieved person can seek compensation from the offeror or promisor for damages incurred if the damages caused have been the product of the commitment made by the offeror or promisor, which the aggrieved party or receiver had been reliant on before the loss of the promise. The doctrine of promissory estoppel allows a promise to be executed, even if the conditions that constitute a legal contract have not been met.
For promissory estoppel to be legally binding, it has to embody the following elements: a notable promise was made by a promisor to a promisee and the promise resulted in actions being taken by the promisee, the promisee was dependent on the promise that was made, the promisee experienced and incurred noteworthy damages as a result of relying on the promise made to him or her, and if the promisee can only be renumerated through the fulfillment of the promise made to him or her.
2. Equitable estoppel
The equitable estoppel, which is based on the principles of fraud, is a defensive theory that forbids one individual from taking undue advantage of another individual where, by deceptive language or actions, the person to be “estopped” has forced or coerced another individual to behave in a certain manner, which causes the other individual to be injured in one way or another.
The key elements for equitable estoppel include the misrepresentation or coverup of data and facts, the knowledge of the facts, a clear intention to be fraudulent, inducement and reliance, damages, injury has been incurred by the complainant, and proof of culpability or blameworthiness.
Other Types of Estoppels
With reference to the Australian, English, and American laws, the common types of estoppels in civil cases include (but may not be limited to:
1. Laches
Laches are commonly used in situations where an individual being litigated intentionally delays an action, at the expense of their adversary.
2. Estoppel by record
Estoppel by record commonly rises as an issue and/or cause of action, through which previous judgments passed on certain causes of action or issues in past legal proceedings cannot be relitigated by concerned parties.
3. Estoppel by deed
Estoppel by deed prohibits an individual who is being litigated from denying the truth of actions carried out or statements made through rules of evidence.
4. Estoppel by silence
Estoppels of silence are used to prevent an individual from making a new statement when they had previously been allowed to do so, and his or her silence placed another individual in a less favorable position.
5. Reliance-based estoppel
Reliance-based estoppel is common in instances where a party relies on the actions or statements given by another party. The estoppel is made against the party that carried out the act or made the statement.
