What is 'Estoppel'

Estoppel is a legal principle that precludes a person from alleging facts that are contrary to his previous claims or actions. In other words, estoppel prevents someone from arguing something contrary to a claim made or act performed by that person previously. Conceptually, estoppel is meant to prevent people from being unjustly wronged by the inconsistencies of another person's words or actions.

BREAKING DOWN 'Estoppel'

There are many different types of estoppel. Equitable estoppel can prevent a person from going back on his word. Collateral estoppel can prevent a person from going back to court on the same grievance. Collateral estoppel is used to prevent legal harassment and abuse of legal resources. For example, if a mother states that a child is not hers, estoppel could prevent her from later trying to claim child support payments from the child's father.

Estoppel is often used as a legal defense tool used when someone reneges on or contradicts a previous agreement or claim. When a fact has been determined by a court or agreed on by the parties to litigation, from then on, neither of the parties can call it in question.

Promissory Estoppel

Another common form of estoppel, often used in contract law, is called promissory estoppel, Essentially, promissory estoppel prevents a party to a contract from doing certain things or acting in a certain way because, in a contract or otherwise, it agreed not to and its contracting party relied on that representation and then acted upon it. For example, promissory estoppel may be used by a charity to enforce gift pledges.

Promissory estoppel is not limited to contracts. The courts have identified four criteria that trigger the existence of a strong enough promise to bring about estoppel between a promisor and a promisee:

• The promisor made a promise significant enough to cause the promisee to act on it.

• The promisee relied upon the promise.

• The promisee suffered significant damage because the promisor reneged on the promise.

• The fulfillment of the promise is the only way the promisee can be compensated.

Estoppel Around the World

Almost all countries with a common-law based judicial system, such as the United Kingdom, Canada and Australia, have incorporated some form of the doctrine of estoppel in their laws. While the name of the principles change from country to country, the concept is essentially the same: a party cannot claim something and its opposite.

If a matter has been decided by a court in one country, especially in criminal matters, then it cannot be retried in another country, based on a form of estoppel known as issue estoppel, itself derived from the notion of res judicata.

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