Free US Law Dictionary

Promissory Estoppel

Estoppel is a legal doctrine recognised both at common law and in equity in various forms. It is meant to complement the requirement of consideration in contract law. In general it protects a party who would suffer detriment if:

• The defendant has done or said something to induce an expectation
• The plaintiff relied (reasonably) on the expectation...
• ...and would suffer detriment if that expectation were false.

Unconscionability by the defendant has been accepted as another element by courts, in an attempt to unify the many individual rules of estoppel.

Estoppel is generally only a defense that prevents a representor from enforcing legal rights, or from relying on a set of facts that would give rise to enforceable rights (e.g. words said or actions performed) if that enforcement or reliance would be unfair to the representee. Because its effect is to defeat generally enforceable legal rights, the scope of the remedy is often limited. Note, however, that proprietary estoppel (applicable in English land law) can be both a sword and a shield and the scope of its remedy is wide.

For an example of estoppel, consider the case of a debtor and a creditor. The creditor might unofficially inform the debtor that the debt has been forgiven. Even if the original contract was not terminated, the creditor may be estopped from collecting the debt if he changes his mind later. It would be unfair to allow the creditor to change his mind in light of the unofficial agreement he made with the debtor beforehand. In the same way, a landlord might inform a tenant that rent has been reduced, for example, if there was construction or a lapse in utility services. If the tenant relies on this advice, the landlord could be estopped from collecting the full rent retroactively.

Estoppel is closely related to the doctrines of waiver, variation, and election and is applied in many areas of law, including insurance, banking, employment, international trade, etc. In English law, the concept of legitimate expectation in the realm of administrative law and judicial review is estoppel's counterpart in public law, although subtle but important differences exist.

This term appears to come from the French estoupail or a variation, which meant "stopper plug", referring to placing a halt on the imbalance of the situation. The term is related to the verb "estop" which comes from the Old French term estopper, meaning "stop up, impede". Note the similarity between the English terms "estop" and "stop".

See principle of venire contra factum proprium non valet[1] in legal systems based on civil law.