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Real Estate Terms & Meanings | Real Estate Dictionary | Property Language Explained |    Jun 25, 2024
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Derived from Norman French estoupail, 'conclusion'. "'Estoppe', commeth of the French word estoupe, from whence the English word stopped: and it is called estoppel or conclusion, because a man's owne act or acceptance stoppeth or closeth up his mouth to allege or plead the truth" 2 Co Litt 352a; "a bung or cork by which you stopped something coming out" McIlkenny v Chief Constable of the West Midlands [1980] 2 All ER 227, 235. A principle established by the English courts of equity that it would be inequitable for a person to go back on his word, or to act inconsistently with his previous representations or deeds, whether these are express or implied, when another has acted thereon to his detriment. Estoppel may even prevent a person from stating that something is true and, therefore, should be now acted on with a legal consequence, if that statement is inconsistent with a previously accepted statement. "Estoppel is when one is concluded and forbidden in law to speak against his own act or deed, yea, though it be to say the truth" Termes de la Ley. (Although the principle of estoppel came from the Normans – McIlkenny v Chief Constable of the West Midlands, supra. – there is no directly related principle in modern French law). "A man shall not be allowed to blow hot and cold – to affirm at one time and deny at another $ndash; making a claim on those whom he has deluded to their disadvantage, and founding that claim on the very matters of the delusion. Such a principle has its basis in common sense and common justice, and whether it is called 'estoppel', or by any other name, it is one which the Courts of law have in modern times most usefully adopted." Cave v Mills (1862) 7 Hurl & N 913, 927-8, 158 Eng Rep 740. "It is the first principle upon which all Courts of Equity proceed, that if parties who have entered into definite and distinct terms involving certain legal results – certain penalties or legal forfeiture – afterwards by their own acts or with their own consent, enter upon a course of negotiation which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced, or will be kept in suspense, or held in abeyance, the person who otherwise might have enforced those rights will not be allowed to enforce them where it would be inequitable having regard to the dealings which have thus taken place between the parties." Hughes v Metropolitan Ry Co [1877] 2 App Cas 439, 448 (HL). In summary, estoppel "is a principle of justice and of equity. It comes to this when a man, by his words or conduct, has lead another to believe that he may safely act on the faith of them – and the other does act on them – he will not be allowed to go back on what he has said or done when it would be unjust or inequitable for him to do so." Lord Denning, The Discipline of Law (1979), p. 223.

Estoppel takes many forms, but may be classified broadly as: (A) 'promissory estoppel'—which arises when a person makes a promise not to insist on, or enforce, his legal rights against another (or his clear and unequivocal representations lead another to believe that those rights will not be insisted on) and, on the strength of that promise or representation, the other party clearly, and reasonably, alters his legal position or takes a particular course of action based on the promise or representation (Combe v Combe [1951] 2 KB 215, 220, [1951] 1 All ER 767, 770 (CA)); The American Law Institute, Restatement Second, Contracts § 90 (1981)). (B) Proprietary estoppel, or 'estoppel by encouragement and acquiescence'—which arises when a person takes a certain action that is to his detriment or prejudice, such as taking possession of property to carry out work therein, and another clearly accepts or acquiesces in that action. For example, "if a man, under a verbal agreement with a landlord for a certain interest in land, or, what amounts to the same thing, under an expectation, created or encouraged by the landlord, that he shall have a certain interest, takes possession of such land, with the consent of the landlord, and without objection by him, lays out money upon the land, a court of equity will compel the landlord to give effect to such promise or expectation." Ramsden v Dyson (1866) LR 1 HL 129, 170 (HL)(Taylors Fashion Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133, [1981] 1 All ER 897, 915; 31 C.J.S., Estoppel and Waiver, § 106). Also, a lessee may be estopped from denying the validity of his lease because of a defect after he has taken occupation, or taken some action in connection with the lease (National Westminster Bank Ltd v Hart [1983] QB 773, [1983] 2 All ER 177 (CA); Anno: 84 ALR2d 920: Lease—Invalidity—Estoppel of Lessee). Similarly, if an owner of land invites another to spend money on that land, giving the impression that an interest in that land will be given over to the person expending the money equity "will require the owner by appropriate conveyance to fulfil his obligation … [or if for some reason a conveyance cannot be made effectively] a court of equity may declare that the person who has expended the money is entitled to an equitable charge or lien for the amount so expended." Chalmers v Pardoe [1963] 1 WLR 670, 681-2. (Duggan v. Wetmore, 137 CCA 486, 221 F 916 (Tenn 1915)). (C) 'legal estoppel', estoppel as a 'matter of fact'—which arises when there is a material fact that induces an action. (D) 'equitable estoppel' or 'estoppel in pais'—when it is not based on a deed or contract but on an action or conduct, or representation ('estoppel by representation'), or when a person remains silent ('estoppel by silence or by inaction'), especially when a person observes an action by another that is based clearly on a misapprehension or a mistaken understanding by that other party (Brown v. New York Life Ins. Co., 59 F Supp 724 (D NJ 1943); Jones v. Sunset Oil Co., 118 Cal.2d 668, 258 P.2d 510, 514 (1953); Pascoe v Turner [1979] 1 WLR 431; Amalgamated Investment & Property Co Ltd (in liquidation) v Texas Commerce Int'l Bank Ltd [1982] QB 84, [1981] 3 All ER 577, 584 (CA); Spruce Falls Power & Paper Co v OPEIU Local 166 (1988) 1 LAC (4th) 418, 433 (Ont. Can)). A similar form of estoppel may be referred to as estoppel 'by convention', where the convention for dealing between two parties clearly indicates that one party will allow a reasonable period of time to elapse before relying on his rights (Republic 0f India v India Steamship Co Ltd (No 2) [1998] AC 878). Equitable and promissory estoppel (also called 'quasi-estoppel') are akin and may be distinguished from estoppel based on a deed, or a record or judgment of a court. Estoppel by deed may arise when a seller does not have title at the time he purports to convey a property, but if he subsequently acquires title to that property, he would be estopped from then denying that title and transferring it as originally represented. Estoppel by a court record or judgment ('estoppel by record') is the oldest form of this doctrine and is enshrined in the maxims interest reipublicæ est ut sit finis litium – 'it is in the public interest that there be an end to litigation' – and nemo debet bis vexari pro eadem causa – 'no one should be in jeopardy twice on the same ground'. 'Equitable estoppel' may also be used generically to refer to any form of estoppel that arises as a principle of Equity, rather than from a court record.

In the US, estoppel may be categorized also as (i) 'estoppel by record'; (ii) 'estoppel by deed' or 'estoppel in writing'; or (iii) 'estoppel in pais' or 'equitable estoppel'. (i) covers matters arising from the records of the courts and applies to such matters as probate and crime; (ii) is the denial of a formal intent of a deed or such aspects as recitals and powers to convey; and (iii) covers the 'quasi', 'promissory' and 'proprietary' estoppel referred to above; all of which arise "from the conduct of a party, using that word in its broadest meaning as including his spoken or written words, his positive acts, and his silence or negative omission to do anything [Drexel v. Berney, 122 US 241, 30 L Ed 1222 (1887))" Pomeroy's Equity Jurisprudence (5th ed. 1941), § 802 (Blue Ridge Realty Co. v. Williamson, 247 SC 112, 145 SE.2d 927 (1965)). (The term 'promissory estoppel' is to be preferred to 'equitable estoppel' because the remedy is itself equitable).

Examples of the application of the doctrine of estoppel to real property are: (i) reduction of rent during war time because a large part of a block of flats was empty – when the war was over the landlord could not insist on the lost rent for the period of the war, because previously he had already collected the reduced sum (Central London Property Trust Ltd v High Trees House Ltd [1947] 1 KB 130); (ii) an agent executing an agreement on behalf of his principal without proper authority, or authority in writing – the principal cannot lead a third party to believe that the agent was authorized, or accept a benefit of the transaction, and then seek to deny the agreement (Corporation of America v. Harris, 5 Cal App.2d 459, 43 P.2d 307 (1935)); (iii) receipt from a debtor of a lesser sum than owed – the creditor clearly indicated that he accepts this as satisfactory and the debtor acts on that understanding – the creditor subsequently is bound by that settlement (D & C Builders Ltd v Rees [1966] 2 QB 617, [1965] 3 All ER 837 (CA); Anno: 44 ALR2d 1114: Building Contract—Satisfactory Work, §§ 8, 9).

Estoppel may be distinguished from ratification as the former induces a prejudicial action by another and is an equitable right, whereas ratification occurs after the event and is a matter of law. Estoppel is closely allied to waiver. However, it may be distinguished from waiver as the latter generally refers to an intentional surrender or relinquishment of a known right for a consideration, whereas estoppel creates a restraint or inhibition on an inconsistent action (Globe Indemnity Co. v. Cohen, 106 F.2d 687, 691-2 (3d Cir. 1939)). cf. misrepresentation, quasi-contract, waiver. See also dedication, estoppel by deed, estoppel certificate, licence by estoppel(Eng), mistaken improver, ostensible authority, recital, tenancy by estoppel, vested right.

Anno: 18 ALR5th 307: Promissory Estoppel—Lenders.
3 Corbin on Contracts (Rev. Ed. 1995), Ch. 8 'The Doctrine of Promissory Estoppel'.
3 Pomeroy's Equity Jurisprudence (5th ed. 1941), §§ 801-821.
28 Am.Jur.2d., Estoppel and Waiver, §§ 1-196.
31 Cor.Jur.Sec., Estoppel and Waiver, §§ 1-220.
T. Villiers and S. Wilkins. The Law of Estoppel, Variation and Waiver (1997), Ch. 8 'Estoppel by Representation', Ch. 10 'Estoppel by Deed', Ch. 11 'Proprietary Estoppel'.
E. Cooke, Elizabeth (ed.). Modern Studies in Property Law. (2001), Ch. 5 'Estoppel and Reliance'.
S.H. Goo. Sourcebook on Land Law (1994), Ch 3 'Proprietary Estoppel'.
Cheshire, Fifoot & Furmston's Law of Contract (13th ed. 1996), pp. 101-109, 316-317, 485-486.
Anson's Law of Contract (27th ed. 1998), pp. 100-108.
16 Halsbury's Laws of England, Estoppel (4th ed. Reissue), paras. 951-1091.
Snell's Equity (29th ed. 1990), Ch. 5. 'Equitable Estoppel'.
M. Pawlowski. The Doctrine of Proprietary Estoppel (1996).
Spencer-Bower and Turner: Estoppel by Representation (3d ed. 1995).

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