Estoppel is a legal principle designed to prevent a party from going back on their word or from asserting a right that contradicts a previous position or representation. There are several types of estoppel, each with its own set of elements and requirements.
Estoppel by Representation
Estoppel by representation, under common law, involves a party making a clear and unambiguous representation of an existing fact. The representation must be intended to be acted upon by another party, and the reliance on this representation should be reasonable. Furthermore, the party relying on the representation must have suffered a detriment due to their reliance.
Promissory estoppel, on the other hand, centres around a promise not to enforce a legal right. For this type of estoppel to be established, there must be a clear promise intended to be binding and relied upon by the promised party. It becomes unconscionable for the promisor to go back on the promise, and there should be existing legal relations between the parties. Importantly, promissory estoppel operates to suspend legal rights but does not itself constitute a cause of action.
Proprietary estoppel involves a clear and unequivocal assurance, representation, or promise, either through words, conduct, or even silence. This assurance gives rise to either a mistaken belief in having an interest or expectation of a future interest, or the belief that a promise is binding. Like other forms of estoppel, it must be reasonable to rely upon the representation, and the relying party must have suffered a detriment. Proprietary estoppel differs in that it pertains to property rights.
Estoppel by Acquiescence
Estoppel by acquiescence is a legal principle that arises when one party, through their actions or inaction, allows another party to believe that certain facts or legal rights are true, and then later attempts to assert a different position to the detriment of the relying party. This doctrine is a form of estoppel that prevents a party from asserting their rights if their behaviour has led another party to rely on a particular understanding. It essentially prohibits a party from "speaking out of both sides of their mouth" by changing their position after encouraging reliance by another party.
Contractual Estoppel
The concept of contractual estoppel is encapsulated in the legal principles articulated in the case of Peekay Intermark Ltd v Australia and New Zealand Banking Group Ltd. In this case, the court clarified that parties to a contract have the legal capacity to agree that a certain state of affairs, whether accurate or not, will serve as the foundation for their transaction. This means that the parties can determine, within the contract, the basis upon which the agreement is formed and how it will subsequently be performed. This form of estoppel operates within the confines of the agreement and prevents the parties from contradicting the agreed-upon facts or matters in relation to the specific aspects of their relationship to which the agreement was directed. Therefore, contractual estoppel serves as a mechanism to uphold the integrity and consistency of the contractual relationship, ensuring that the parties are bound by the representations and agreements they make within the contract.
Estoppel by Convention
Estoppel by convention, also known as estoppel by agreement, arises when two parties engage in negotiations or operate under a contract based on a shared assumption or mutual understanding regarding the legal effect or interpretation of that contract. If both parties are aware that the other is operating under the same belief, assumption, or understanding, and they subsequently regulate their dealings based on this shared understanding, they are bound by it.
Estoppel by Deed
Estoppel by deed is a rule of evidence that operates in the context of statements made in a deed, particularly those stated in the recital of a deed. This rule renders such statements evidentially conclusive against the parties involved in the deed. Once a statement is made in a deed, the parties are estopped from asserting a contrary position or denying the truth of the statements made within that deed.
Understanding these distinctions is vital in legal contexts, as estoppel provides a remedy when parties rely on representations or promises to their detriment. The application of estoppel principles may, however, vary based on jurisdiction and the specific circumstances of each case.
You can learn more about this topic with our Contract Law, Land Law, and Trusts Law notes.
