Equity Essay Example

  • Category:
    Law
  • Document type:
    Essay
  • Level:
    Undergraduate
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Lecturer

The Nature and Value of Equitable Estoppel

In a general sense, an estoppel is a legal term which by its essence presupposes evidence that is provided against a person so as not to deny a truth concerning a fact that has already been concluded and settled. A person is “estopped” when a court finds that person did an act demanding or worthy of an estoppel1. The party is therefore incapable of making particular arguments that are related to a set of given rights. If the party is a defendant, he/she can be termed as “estopped” from making a related defence; and if he is a plaintiff, he/she can be termed as “estopped” from drawing or making any related argument that is in opposition to the defendant2. An estoppel explained from its etymology means a stopper and in its legal sense it stops people from disowning their word, or it forbids inconsistency in behaviour if that very behaviour has effect on another person3. In this paper is a discussion on the nature of an estoppel, the varieties and applications with relevant cases being cited in each case. Special reference will be made to equitable estoppel and its relevance in the contemporary times and if possible show cases where it can be applied.

Ordinarily, an estoppel can be seen as stopping people form changing their minds, but in its nature, it is different in that: people can only be responsible for their own promises if those promises adversely affect others and legally it can be used to provide a legal apparatus that enforces consistency4. There are therefore different ways in which and estoppel can be applied. In a situation where an agreement cannot be reached or no consideration is made, a court can use an estoppel to enforce promises that do not fully qualify to be formal contracts. Secondly, estoppel can be applicable in situations of contracts. In a contract, people would want to make further promises on the duties they perform or understand them. In such cases, estoppel can be invoked as a way of enforcing faithfulness to people’s performance5. In the same way, a party in a contract can be held on their words on how variant a contract is especially about how to enforce rights or terms of performance. Termination of a contract will be estopped if a party in the contract attempts terminating the same contract. A bank cannot therefore deposit money into a person’s account and then revoke the deposition of which it will be estopped from repossessing the money6.

Another place where estoppel can be used to make people work on what they have said is true, and even if it was not true and whether they would like to change their minds7. Adopting a position by conduct or a statement shows one’s position making it reliable by another. If they rely on this position, the arising of an estoppel will be inevitable8. Unfairness is another issue that invokes an estoppel. In a court where a party has made promises, the promises will be enforced on them by the court if they affect another party relying on them because they have been led to believe so by the promising party. People who act in an idiosyncratic way and the idiosyncrasies affect another are therefore are restrained from inconveniencing them9.

In state matters, when an aggressor is proportionally punished by the state, there is no violation of his rights. However, if a non-aggressor is punished, there is a violation of his/her rights. In such a case, non-aggression remains a necessary condition for the law’s validity even though it is not sufficient10. Consistency in this case will imply the argumentation of a claim. Since an argument establishes a truth, inconsistency will be owning and at the same time disowning a truth. A given arguer Z stating P is true and at the same time not-P is true will be inconsistent or wrong because P and not-P cannot be one and the same thing but contradictories.

Historically, there has been many estoppels but labelled differently though most were the same. Basically, there could be two main varieties of estoppel; namely, the common law estoppel and the equitable estoppel. The common law estoppel is described as representing and existing fact or a fact in the past that is not of intention or even law. An employer overpaying a worker $100 while insisting the money is the worker’s; then trying to retrieve it back after the work has spent it is estopped form retrieving the money. In this case, there is not law or intention but a representation of fact. The employer in this case cannot be allowed revoke the fact represented. This kind of estoppel plays the function of a defence and not a support for a given claim.

An equitable estoppel is another type that involves both promissory as well as the proprietary estoppels. A proprietary estoppel is historically explained in terms of rights on the usage of an owner’s land along with the disputes that arise during the transfers of the land ownership11. However, with time, a proprietary estoppel has been put in limited cases. There are various elements of a proprietary estoppel in regarding the claimant and a defendant. The claimant has made a mistake concerning their legal rights, ordinarily because the real owner tried to convey a property although that transfer is defective for a given reason12. Secondly, the claimant committed an act of relying on the move. Thirdly, on the side of the defendant, he is cognizant of a certain legal right he/she has and it is inconsistent the one claimed by the given claimant. Fourthly, the defendant knows a mistaken belief harboured by the claimant; and finally the defendant has influenced or encouraged the claimant to relying on him (the defendant)13. A typical case can be given of a father promising property to his son, and the son spending large amounts of money to improve the property, but the father fails to actually give or transfer the property to the son. If the father dies and the son claims to equitably own the land, the trustees to the father’s property are estopped from denying the proprietary interest of the son and they should convey it to him.

A promissory estoppel is one that needs a promise that is unequivocal, either by conduct or words; evidence that shows that there is an alteration on the promisee’s position due to the promise; and inequity in the case of the promisor went back on their promise. Since an estoppel is a shield, there is no way it can stand on its own14 and at the same time it cannot extinguish the rights of an individual. In the case of Central London Property Trust Ltd. V. High Trees House Ltd (1947)15, the company that was the plaintiff then restored back the full payment of rent from the beginning of 1945. This could have been made provided there was a suitable period of time for the notice given beforehand. What was established in this case was a fair way of realizing a fair way of countering a negative promise, where persons can promise the enforcement of full rights.16

A Promissory estoppel is discretionary in that it cannot recognize a promise made by a party to accept an amount of money as part of a debt on the grounds that the money is taken by force. The case of D&C builders v. Rees17 exemplifies this point. In this case, the defendant employed workers in his premise who completed the work and submitted the accounts totalling £746 13s 1d. The defendant paid £250 of the total amount while removing an amount of 14 from the bill. In July 1964, the defendant owed the plaintiff £482 13s 1d. There was no dispute at this stage of the amount of the work that had been done, though the defendant failed to pay. When the case was taken to court, it was decided on the grounds of lack of equity the defendant should pay. The defendant failed to pay and appealed the case where the judge ordered her to pay the total amount since she had compelled the creditors to accept £300 rather than the £480. This, as the court of appeal decided was intimidation to accept lesser amount which in it was wanting in equity and thus full amount were enforced to be paid by the defendant.

Promissory estoppel can operate to eliminate the harshness that is imminent in the common law. In Collier v. P&MJ Wright (Holdings) Ltd18, the Appeal Court posited that it cannot allow a creditor to go back to a promise or forebear to seek a debt balance in exchange of payment in part since this was inequitable. The promisee had only one opportunity of making a part payment in the actual sense. The actual payment would expel the chances of the promisee taking the advantage of the common law which states that the creditor can compel the promisee in paying his due. In Australia, the promissory estoppel has been elaborated so as to take care of cases which do not have a legal relationship that pre-exists. In fact, the promissory estoppel can be applied as a “sword” against a party rather than a “shield” as witnessed in the Walton stores Ltd vs Maher19 where an estoppel was used against Waltons as they denied the contract. On top of this, the award was given in a way that implied that the interest expectation. In this case, estoppel compelled action rather than stoppage of a move to an act20.

Steinberg21 maintains that the promissory estoppel, which was used to in place of consideration is slowly is moving to replace the Statute of Frauds that is contained in Section 217A of the English law. However, this only replaces particular parts like section 90 that deals oversees the restatement of contracts. This however, is different from what is implied in the case between Waltons v. Maher22 where the questions of promise; dishonesty on the side of the promittant; the special relationship exist between the along with eh beneficior; and the irreversibility of change of a given situation on the side of the promise’s beneficior. All these imply an aspect of unconscionability that is satisfied by a party encouraging another to make assumptions that will result in reliance.

From the various applications of the equitable estoppel that have been discussed above, a relevance of their application is evident in different dimensions. Assumption on the side of the claimant that the defendant will act in a given way makes it relevant23. Still, inducement is another thing that makes estoppel successful because an assumption is supposed to have been made by a representor who is required for causation24. Another factor for successful estoppel is the detrimental reliance where a plaintiff is supposed to suffer some danger resulting from the assumptions ones assumption as induced by a defendant. There is also a loss in other terms on the side of the claimant. Reasonableness too is called to place when an estoppel is being made to establish whether the party who is relying is worthy of being accorded protection, that is, was there any reasonableness in the act. Finally, unconsionability is another fact that inquires into the conduct of the representor and if it deserves to be blamed, that is, if they did act in a way that is unconscionable. In other words, the whole thing sums up all the factors contributing to the successfulness of an estoppel. Having these vital elements at hand therefore makes estoppel still relevant in the present times.

The whole idea of an estoppel rotates around the question of sticking to one’s word in a contract. A person ought to keep his word knowing the kind of effects that may arise since most of all things that an individual may say they always involve another, either directly or by implication. An estoppel therefore is a “stop” to wavering stand that puts other people in danger of being unfaithful and dishonest. It is therefore worthwhile to necessarily assert that an estoppel holds water amidst the various challenges that have been put across the way of the estoppel law. No matter how people may disagree on its validity and relevance, the fact remains that individuals will never stop owning to their words otherwise they will become unpredictable. It is therefore obliging to accept this fact, that an equitable estoppel will continue being important by making deals among people more consistent and useful.

References TTop of FormBottom of FormBottom

Blum, Brian A. Contracts: Examples & Explanations. Austin: Wolters Kluwer Law & Business, 2007. Print.

Central London Property Trust Ltd v. High Trees House Ltd [1956] 1 All ER 256

Collier v P & MJ Wright (Holdings) Ltd 2008 1 WLR 643

Combe v. Combe (1951) 2 KB 215.

D & C Builders Ltd v Rees [1965] 3 All ER 837.

Feinman, Jay M. The Last Promissory Estoppel Article. Fordham Law Review,Issue 2 (1992).

Horneberger, Lee. A Review of Promissory Estoppel Law in Michigan, 2007.

Johnson, Carla S. «Family Law-Application of Equitable Estoppel in Paternity and Visitation Cases-Mommy’s Baby, Mama’s Maybe: A New York Court’s Decision to Hold a Same-Sex Partner Financially Responsible for a Non-Biological and Non-Adoptive Child-HM v. ET, No U-110-07 (NY Fam. Ct. Sept. 11, 2007).» UALR L. Rev. 31 (2008): 543.

Kinsella Stephan N. Estoppel: A New Justification for Individual Rights. Reason Papers 17 (1992).

Kochan, Donald J. «Book Note: The Other Side of the Coin: Implications for Policy Formation in the Law of Judicial Interpretation: A Review of ‘A Matter of Interpretation’, by Antonin Scalia.» Cornell Journal of Law and Public Policy 6.2 (1997): 463.

Ross, Terence P. Intellectual Property Law: Damages and Remedies. New York, N.Y: Law Journal Press, 2000. Continually updated resource.

Slaughter and May, The Doctrine of Contractual Estoppel in the Financial Services Arena, December, 2010.

Spence, Michael. Protecting reliance: the emergent doctrine of equitable estoppel. Hart, 1999.

Steinberg, Jeffrey G. Promissory Estoppel as a Means of Defeating the Statute of Frauds, 44 FordhamL. Rev. 114 (1975).Available at: <<http://ir.lawnet.fordham.edu/flr/vol44/iss1/4>>

Vecchione, Daniel D. An Estoppel by any Other Name. Surrey Law Working Papers. 2 (2012).

Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, 62 ALJ 110

Weitzenbock, Emily M. English Law of Contract: Promissory Estoppel. Norwegian Research Centre for Computers & Law. February, 2012.

1
Daniel D. Vecchione, Surrey Law Working Papers Short notes: An Estoppel by any Other Name, 4

2
John Cartwright, Protecting Legitimate Expectations and Estoppel in English Law. Electronic Journal of Comparative Law, 100

3
Ibid, 1.

4
Kochan, Donald J. «Book Note: The Other Side of the Coin: Implications for Policy Formation in the Law of Judicial Interpretation: A Review of ‘A Matter of Interpretation Cornell Journal of Law and Public Policy  300.

5
Emily M. Weitzenbock, English Law of Contract: Promissory estoppels, 5.

6
Lee Honrnberger, A review of Promissory Estoppel Law in Michigan, 3.

7
Michael Spence, Protecting Reliance; the Emergent Doctrine of Equitable Estoppel, 210.

8
Ibid, 5.

9
Slaughter and May, The Doctrine of Contractual Estoppel in the Financial Services Arena, 3.

10
Heiko A. Giermann ,The Evidentiary Value of Bills of Lading and Estoppel,203.

11
Brian A. Blum, Contracts: Examples & Explanations,10.

12
Terence P. Ross, intellectual property law. Damages and Remedies, 100.

13
Jay M. Feinman, The Last Promissory Estoppel Article,5.

14
 Combe v. Combe (1951) 2 KB 215.

15
Central London Property Trust Ltd v. High Trees House Ltd [1956] 1 All ER 256

16
Emily M. Weitzenbock, English Law of Contract: promissory estoppel, 4.

17
D & C Builders Ltd v Rees [1965] 3 All ER 837.

18
Collier v P & MJ Wright (Holdings) Ltd 2008 1 WLR 643

19
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, 62 ALJ 110

20
N. Stephan Kinsella, Estoppel: A New Justification for Individual Rights, 2.

21
Jeffrey G. Steinberg, Promissory Estoppel as a means of defeating the statute of frauds, Fordham Law Review, 1975.

22
Ibid,6

23
Daniel Davidson- Vecchione, Surrey Law Working Papers Short Notes, 4.

24
Carla S. Johnson, Family Law-Application of Equitable Estoppel in Paternity and Visitation Cases-Mommy’s Maybe: A New York Court’s Decision to Hold a Same-Sex Partner Financially Responsible for non Biological and Non-Adoptive Child. 543