Equitable Estoppel Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Equitable Estoppel, written in plain English, along with examples of how it is used.

What is Equitable Estoppel?

n. where a court will not grant a judgment or other legal relief to a party who has not acted fairly; for example, by having made false representations or concealing material facts from the other party. This illustrates the legal maxim: “he who seeks equity, must do equity.” Example: Larry Landlord rents space to Dora Dressmaker in his shopping center but falsely tells her a Sears store will be a tenant and will draw customers to the project. He does not tell her a new freeway is going to divert traffic from the center. When she fails to pay her rent due to lack of business, Landlord sues her for breach of lease. Dressmaker may claim he is equitably estopped.

History and Meaning of Equitable Estoppel

Equitable estoppel is a legal principle derived from the concept of fairness and equity. It is a doctrine that allows a court to prevent a person from asserting their legal rights if that person has acted unfairly or misleadingly, causing someone else to change their position based on those actions. The principle suggests that it would be unfair to allow the person who has acted unfairly to go back on their word and assert their legal rights.

Equitable estoppel is a flexible doctrine, and the requirements for its application may vary depending on the legal jurisdiction or the specific facts and circumstances of the case. However, some general elements must be present, such as a false representation, an actual or potential change of position, and detrimental reliance by the affected party.

Examples of Equitable Estoppel

  1. A company sends a signed contract to a vendor to deliver goods with a specific deadline. The vendor relies on the contractual commitment and invests significant resources to fulfill the order. However, the company changes its mind and cancels the order without justification. The vendor can claim equitable estoppel to prevent the company from asserting their right to cancel the order.

  2. A landlord fails to inform a tenant that the leased property has significant structural problems, leaks, and mold. The tenant discovers the issues and refuses to pay rent until the landlord repairs the property. The landlord cannot sue the tenant for breach of contract if the tenant can demonstrate that he relied on the landlord's misrepresentation and would not have signed the lease if he had known about the problems.

  3. An employer tells an employee that he will receive a promotion if he attains a professional certification. The employee obtains the certification and asks for the promotion, but the employer changes his mind and denies the promotion without a valid reason. The employee may argue that he relied on his employer's representation and suffered damages as a result.

Legal Terms Similar to Equitable Estoppel

  • Promissory Estoppel: A legal doctrine that allows a party to enforce a promise made by another party, even if there is no formal contract between them. However, the party seeking enforcement must show that he relied on the promise and suffered a detriment as a result.
  • Estoppel by laches: A doctrine that bars a party's claims or defenses if they unreasonably delayed in pursuing them and that delay caused prejudice to the other party.
  • Waiver: An intentional relinquishment of a right or legal claim by a party who knows of its existence. Once a party waives a right, he cannot later assert it.