Estoppel

Definition of 'Estoppel'


A legal defense tool used when someone reneges on or contradicts a previous agreement or claim. 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.

Investopedia explains 'Estoppel'


There are many different types of estoppel. Two common forms are equitable estoppel, which can prevent a person from going back on his word, and collateral estoppel, which 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.


Filed Under:

comments powered by Disqus
Hot Definitions
  1. 80-10-10 Mortgage

    A mortgage transaction in which a first and second mortgage are simultaneously originated. The first position lien has an 80% loan-to-value ratio, the second position lien has a 10% loan-to-value ratio and the borrower makes a 10% down payment. 80-10-10 mortgage transactions are piggy-back mortgage transactions, and are frequently used by borrowers to avoid paying private mortgage insurance.
  2. Passive ETF

    One of two types of exchange-traded funds (ETFs) available for investors. Passive ETFs are index funds that track a specific benchmark, such as a SPDR. Unlike actively managed ETFs, passive ETFs are not managed by a fund manager on a daily basis.
  3. Walras' Law

    An economics law that suggests that the existence of excess supply in one market must be matched by excess demand in another market so that it balances out. So when examining a specific market, if all other markets are in equilibrium, Walras' Law asserts that the examined market is also in equilibrium.
  4. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action. Market segmentation enables companies to target different categories of consumers who perceive the full value of certain products and services differently from one another.
  5. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following:
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option is purchased and the lower premium option is sold - both at the same time. The higher the debit spread, the greater the initial cash outflow the investor will incur on the transaction.
Trading Center