Estoppel - Uni Study Guides

09/12/2019 Estoppel - Uni Study Guides
Estoppel
From Uni Study Guides
This article is a topic within the subject Principles of Private Law.
Contents
1 Required Reading
2 Introduction
3 The nature of estoppel by conduct
3.1 Common Law Estoppel
3.2 Equitable Estoppel
3.2.1 Proprietary Estoppel
3.2.2 Promissory Estoppel
4 History of Estoppel - fact and future conduct
5 Elements of Estoppel
5.1 Assumption
5.2 Inducement
5.3 Detrimental reliance
5.3.1 Types of detrimental reliance
5.3.2 Relying Party’s circumstances
5.3.3 Detriment must be material
5.4 Reasonableness
5.4.1 The Reasonableness inquiry
5.5 Unconscionable conduct
5.6 Departure or threatened departure
6 Effects/Reliefs of Estoppel
6.1 Common Law Estoppel
6.2 Equitable Estoppel
6.2.1 Satisfying the ‘equity’
6.2.2 Reliance interest and expectation interest
6.2.3 Development of the approach
6.2.4 Current approach - conclusion
7 Cause of Action
7.1 Previous acceptance of Estoppel as a cause of action
7.2 Estoppels arising from future conduct
7.3 Remedial flexibility
8 Estoppel and Contract Law
8.1 Estoppel in formation (pre-contract negotiations)
8.2 Privity (Estoppel)
8.3 Formalities
8.4 Contract Variations
8.5 Pre-contractual variations
8.5.1 Estoppel by convention
8.5.2 The parol evidence clause
8.6 Entire agreement clauses
8.7 Post-contractual variations (breach of contract as detriment)
8.7.1 Termination of contracts (estoppel)
8.8 Estoppel as an alternative to contract
8.9 Estoppel and misrepresentation
9 Why protect reliance?
10 How should reliance be protected?
www.unistudyguides.com/wiki/Estoppel 1/13
10.1 Promise, unconscionability and reliance

10.2 Economic efficiency
11 References
Required Reading
Paterson, Robertson & Duke, Principles of Contract Law (Lawbook Co, 3rd ed, 2009), pp. pp. 141-176
(chapter 9).
Introduction
[1]Theprinciple of estoppel is in place to protect a person against a loss suffered as a result from a reliance on a
promise or representation.
The doctrine of Consideration fails to protect detrimental reliance. As long as there was no consideration, there
was no contract, and thus a person who suffered from a reliance on a promise will not be able to receive
remedies under contract law. Rather, he can seek remedies in estoppel.
The nature of estoppel by conduct

[2]Estoppel by conduct means “an inconsistent conduct by one party that causes or threatens to cause harm to
another as a result of the second party’s reliance on that conduct.[3] ”
Representor – party making a representation which induces another party

Relying Party – party acting in reliance on the Representor’s promise
Estoppel will operate when the Relying Party has acted on assumption (or reliance) on a representation made
by the Representor, and will suffer detriment if the Representor will act inconsistently with his representation.
For example, the Relying Party acts on the assumption that the Representor has signed/will sign a
contract for sale of goods.
He then makes arrangements (incurring expenditure) to transport and store those goods.
It is then revealed that the Representor has not signed the contract, or will not do so in the future.
The Relying Part has thus suffered a detriment by relying on a representation made by the
Representor, whose conduct proved to be inconsistent with his representation.
There are two kinds of estoppel by conduct:
Common Law Estoppel
[4]Common Law Estoppel or representation of fact occurs where the Relying Party acted upon an assumption
of an existing fact.
Namely, the Representor induced the Relying Party to believe he has signed a contract.
The effect of Common Law Estoppel is to prevent the Representor from denying his representation when in
court. The contractual rights and obligations will be determined as if the Representor’s representation was true.
This means that the Representor will be ‘estopped’ from denying he has signed the contract. For all
intents and purposes, the contract will be deemed as signed, and therefore enforceable.
Equitable Estoppel
[5]EquitableEstoppel or representation of future conduct occurs where the Relying Party acted upon an
assumption as to the future conduct of the Representor.
Namely, the Representor induced the Relying Party to believe he will sign the contract in the
future.
The effect of Equitable Estoppel is to prevent the Representor from acting inconsistently with his representation
without taking steps to ensure the Relying Party does not suffer detriment as a result of his inconsistent
conduct.
This means the Representor will need to give reasonable notice of its intention to act inconsistently
with the representation, and in the case damages will still be suffered by the Relying Party,
compensate the Relying Party for those damages.
Equitable Estoppel can be divided into Proprietary Estoppel (representation deals with interest in land) and
Promissory Estoppel (all other Equitable Estoppel which doesn’t relate to land).
Proprietary Estoppel
[6]Proprietary Estoppel operates where the Representor is an owner of land who induces the Relying Party to
believe that the Relying Party has or will have an interest in the land.
If the Relying Party then acted to his detriment in reliance of being granted that interest in the land,
the Representor will be required to either ‘make good’ of that assumption (give the Relying Party
interest in the land) or compensate him accordingly.
Promissory Estoppel
[7]Promissory Estoppel operates where the Representor induces the Relying Party to believe that certain
contractual rights within their contracts will not be enforced.
If the Relying Party changed his position in reliance on that representation, the Representor will
not be allowed to enforce those rights.
This is a very narrow view of Promissory Estoppel. It has developed over the years:
Central London Property Trust Ltd v High Trees House Ltd[8]:

Revival and broadening of Promissory Estoppel.
Where a Representor makes any representation which affects legal relations, and that
representation was both intended to be acted upon and in fact acted upon, Promissory
Estoppel will prevent the Representor from acting inconsistently with that representation.
No cause of actions for damages, simply forcing Representor to make good of his
representation.
Requires pre-existing legal contract
Still Only operates as a defence from enforcing certain rights
Waltons Stores (Interstate) Ltd v Maher:

Promissory Estoppel can occur in pre-contractual negotiations – no need of pre-existing
legal relationship.
Promissory Estoppel could be used to support a case of action in contract.
Landmark case, departure from the idea that consideration is needed and reliance does not
matter.
History of Estoppel - fact and future conduct
[9]A decision was made in Jordan v Money[10] that a promise or representation as to future conduct could only
be binding by way of contract – this meant that Estoppel was now limited only to reliance on existing fact and
not future conduct.
This decision was made to promote sanctity of bargains and ideals of self-reliance.
This decision continues to apply within the Common-Law. However, Proprietary and Promissory Estoppel are
the two exceptions within equity.
Elements of Estoppel
There is no universal agreement on the necessary elements to establish an estoppel. However, three elements
have been established as essential and a further three in some cases should also be considered.
1. Assumption
2. Inducement
3. Detrimental reliance
4. Reasonableness
5. Unconscionability
6. Departure or threatened departure
Assumption
[11]The Relying Party must have adopted an assumption.
Initially, it was held that it was necessary that the Representor encouraged an assumption that a legal
relationship would ensue. This was discussed in Mobil Oil Australia Ltd v Wellcome International Pty Ltd:
“it is a necessary element of the principle that the defendant has created or encouraged an
assumption that ‘a particular legal relationship’ or ‘an interest’ would arise or be granted[12]”
However, this has since been expanded into a broader view, that the creation of an assumption of a promise to
be performed also satisfies the assumption element. This was established in Austotel v Franklins Selfserve, and
later held in W v G.
In conclusion, it is now not necessary that the defendant has created or encouraged an assumption that ‘a
particular legal relationship’ would arise.
Inducement
[13]“The assumption adopted by the Relying Party must have been induced by the conduct of the Representor.
[14]”
Express inducement is not required. Implied promises to complete a contract will constitute
inducement
Waltons Stores (Interstate) Ltd v Maher
An estoppel can only arise from a clear or unequivocal promise or representation
Legione v Hateley
This is inconsistent with later decisions. High Court does not require clear or
unequivocal promises.
Preferred approach is to ask whether the Relying Party was induced to adopt an assumption as to
the future conduct of the Representor, rather than whether an equivocal promise or representation
Murphy v Overton Investments Pty Ltd[15]
Detrimental reliance
[16]“The relying party must have acted on the assumption in such a way that he or she will suffer detriment if
the Representor is allowed to depart from the assumption.[17]”
There are two types of loss:
1. Expectation loss - loss of the benefit the Relying Party expected to receive.
2. Reliance loss - loss suffered because of reliance on the assumption when the Representor acts
inconsistently with it.
In Australia, it is held that the Relying Party must have suffered a Reliance loss in order to establish estoppel.
Types of detrimental reliance
[18]There are different forms of detrimental reliance:
Expenditure of money (usually on improvements to land or in preparation for a contract)

The entrance into a contract may prove a detrimental loss when the Representor acts inconsistently
(i.e. exclusivity agreement)
Expenditure of time or energy (i.e. painting a house, domestic services)
Inactivity resulting in the loss of an opportunity to gain a benefit (not using an option/contractual
right because relying on representation)
Inactivity won’t count when the Relying Party couldn’t have done anything anyway
Detriment does not have to be financial. However it needs to be affirmatively demonstrated.
(Commonwealth v Verwayen)
Relying Party’s circumstances
[19]Whether an action is detrimental depends on the Relying Party’s circumstance. A promissory Estoppel
could only arise if the Relying Party has altered its position on the faith of the representation, and would suffer
a detriment if the Representor would be allowed to assert his original rights.
Sometimes the Relying Party’s financial situation may play a role in whether they suffered a detriment or not.
Detriment will be assessed at the time that the Representor seeks to go back on his representation. (Je
Maintiendrai Pty Ltd v Quaglia)
Detriment must be material
[20]Detriment suffered must be material, significant, or substantial. This is discussed in Hawker Pacific Pty
Ltd v Helicopter Charter Pty Ltd:
There is a clear distinction between the minimalistic ‘valuable’ requirement for consideration and
the more substantial ‘material’ requirement for detrimental reliance.
This is because estoppels lack the bargain element (or the acceptance and mutuality)
Rather, the detriment itself needs to justify the imposition of obligations
Thus, it needs to be substantial.
However, it should be noted that there is no requirement that the detriment has already been suffered by the
time the estoppel is sought. The prospect of a future detriment is sufficient.
Reasonableness
[21]Thescope of Estoppel is limited by the mechanism of reasonableness. The reasonableness requirement is

concerned with whether the Relying Party deserves protection. It is broken into two parts:
1. Reasonableness of the assumption

Depends on the nature of the assumption, the conduct of the Representor that induced the
assumption, and the relationship between the parties.
Murphy v Overton Investments Pty Ltd.
2. Reasonableness of the action taken
This depends on the nature of the action taken by the Relying party, in the context of the
relationship between the parties and the other circumstances of the case.
The Reasonableness inquiry
1. The type of conduct engaged in by the Representor

2. The nature of the assumption itself
3. Identity of the Representor
4. The context in which the assumption is induced
5. Whether the Representor encourages or knows of the reliance
6. Nature of the relationship between the parties.
Unconscionable conduct
[22]Thescope of Estoppel is also limited by the mechanism of unconscionableness. The requirement of

unconscionable conduct is concerned with whether the Representor deserves blame.
Essentially, estoppel is sometimes seen as about stopping or granting relief for unconscionable conduct. It is
therefore sometimes seen as a positive requirement rather than just a justification for granting relief. This was
held in Silovi Pty Ltd v Barbaro[23].
Unconscionable conduct is identified through an examination of the role of the Representor in inducing the
adoption of an assumption, his knowledge of this assumption being adopted, and his intention to induce
reliance.
However, reasonableness is also considered. The courts hold that it is not unconscionable to depart from an
assumption which has unreasonably been adopted or relied upon.
Departure or threatened departure

[24]Traditionally,
it has been held that estoppel will only arise if the Representor departs or threatens to depart
from the assumption. It is this departure which constitutes the unconscionable conduct.
However, there has been case law supporting the view that estoppel can come into effect even before the
departure, once an assumption has been induced and reasonably been relied upon (to detriment).
Effects/Reliefs of Estoppel
Common Law Estoppel
[25]The effect of Common-Law Estoppel is to prevent the Representor from departing from the
representation/denying it. The rights of the parties are determined as if the representation was true – by
reference to the ‘assumed’ or ‘represented’ state of affairs.
Common-Law Estoppel may be used both defensively and offensively:
Defensively: stops Representor from enforcing contractual rights, denies causes of action
Aggressively: puts contract into effect, allows causes of action
Equitable Estoppel
Satisfying the ‘equity’
[26]Theeffect of Equitable Estoppel is to raise equity in favour of the Relying Party. Equity in this context
means an entitlement to some equitable relief.
Reliance interest and expectation interest
The ‘interests’ of the Relying Party can be seen as twofold:
Reliance interest:
Protection from harm resulting from his reliance on a representation
Protected through monetary compensation
Expectation interest:
Receiving the benefit he expected to receive or was led to believe that he had.
Protected through enforcing the promise through specific performance or monetary
compensation instead.
It is true that these interests usually overlap, and the protection of the expectation interest will ensure the
protection of the reliance interest since the Relying Party will receive the benefit it was counting on when
suffering the detriment.
Development of the approach
[27]The remedy to Equitable Estoppel was initially held to be the “minimum equity to do justice to the
plaintiff[28]”.
In Waltons Stores (Interstate) Ltd v Maher, the courts adopted a reliance interest based approach – the
minimum necessary to prevent the detriment suffered by the Relying Party. This means that the enforcement of
promises was not available.
This was questioned in Commonwealth v Verwayen, where there was an opinion that expected interest should
be protected, and the enforcement of promises should be the remedy available in order to fulfil the equity.
Finally, in Giumelli v Giumelli, it was accepted by the majority of the High Court that the judgment in
Commonwealth v Verwayen indicated a flexibility of the remedies available in the case of Equitable Estoppel -
the Relying Party has a prima facie (at first sight) right to relief based on the assumed state of affairs, or in
other words, to ‘make-good’ or enforce the promise made.
Recognises expectation interest

Where specific performance appears inappropriate, compensation will be calculated as per the
expectation interest.
Current approach - conclusion
[29]The usual remedy for Equitable Estoppel is to ensure that the Representor ‘makes good’ of the
representation. However, this remedy is sometimes substituted for monetary compensation when:
It might be impossible, impracticable or inappropriate to enforce the promise (fulfil the expectation
of the Relying Party) – expectation of the Relying Party may be indefinite, a clean break between
the parties is required or the enforcement of the assumption may cause detriment to a third party
Principle of justice – the ‘minimum equity’ requirement, if the enforcement of the promise would
end up being inequitably harsh, unjust to the estopped party, or “would exceed what could be
justified by the requirement of conscientious conduct ”
That being said, the courts usually enforce the promise. This is because it is usually hard to quantify the
detriment with precision and replace it with a monetary compensation. McHugh J noted in Commonwealth v
Verwayen: “Often the only way to prevent the promisee suffering detriment will be to enforce the promise[30]”.
However, the minimum equity principle does play an important role in at least three scenarios:
1. Where the detriment can be quantified accurately

2. When the detriment cannot be quantified, however it would be disproportionate to the expected
benefit.
3. When detriment can be prevented by other means.
Cause of Action
[31]There is a question as to whether estoppel can create independently enforceable rights or whether it can only
be relied upon when it supports another cause of action, such as actions in contract or tort law. In
Commonwealth v Verwayen, there are conflicting opinions both against estoppel as a cause of action (Deane J)
and for it (Brennan & McHugh JJ).
There are three reasons why estoppel has been accepted an independent cause of action.
1. Previous cases - Equitable Estoppel has been accepted as a cause of action frequently by the courts
already.
2. Future conduct - Since Equitable Estoppel is not confined to assumptions of fact (also extends to
future conduct), it logically cannot simply establish an assumed state of affairs.
3. Remedial flexibility - the discretion exercised by the court in granting relief entails that it is the
estoppel itself to which the court is giving effect.
These three reasons will be explained further below:
Previous acceptance of Estoppel as a cause of action

[32]The leading examples of cases in which estoppel itself was the cause of action are proprietary estoppel
cases, where the Relying Parties were able to claim their interests solely on the basis of their reliance on the
assumption. There has been an artificial attempt to rationalise these cases as actions for breach of trust by
Deane J in Commonwealth v Verwayen, but this is not supported by the other numerous cases in which
proprietary estoppel constituted a cause of action.
Since the unification of Proprietary and Promissory Estoppel in Waltons Stores (Interstate) Ltd v Maher, it
follows that both can serve as a cause of action. Equitable Estoppel has since been accepted as a cause of
action by the Supreme Court even in cases which did not involve Proprietary Estoppel. This is exemplified by
the decision in W v G.
Estoppels arising from future conduct
[33]Those who oppose Estoppel as a cause of action contend that the effect of estoppel is simply to prevent the
Representor from denying the assumed state of affairs[34]. However, an Estoppel arising from reliance on an
assumption as to future conduct can’t logically prevent the denial of an assumed state of affairs – it must
create rights. For example:
A promises to transfer a car to B but fails to do so.

The court can’t logically ‘prevent A from denying he transferred the car’ – this makes no sense.
Rather, the court either orders A to transfer the car or to provide monetary compensation to B.
Thus, the estoppel is an independent source of rights, and a cause of action.
Remedial flexibility
[35]Ifestoppel was simply a support to another cause of action, then the remedies provided would be generated
according to that cause of action. However, estoppel has its own remedy and therefore is its own cause of
action. Examples:
Waltons Stores (Interstate) Ltd v Maher - remedy generated according to estoppel rather than
breach of contract.
Commonwealth v Verwayen, Giumelli v Giumelli - Court recognised that the court exercises
discretion in giving effect to equitable estoppel. The discretion means that it is the estoppel which
generates the remedy.
Estoppel and Contract Law

[36]The principle of Equitable Estoppel is not a part of contract law, and is not contractual in nature. In Giumelli
v Giumelli the court gave three reasons why Equitable Estoppel does not undermine the law of contract, even
without a strict reliance-interest based approach:
1. Courts discretion means that consideration is not being undermined – breach of contract gives rise
to compensatory damages, Equitable Estoppel merely gives rise to equity in favour of the Relying
Party.
2. In contract, obligation is derived from the promise of the Promisor. Estoppel is concerned with the
assumption or expectation of the Relying Party (Promisee).
3. Estoppel doesn’t arise because of an unperformed promise, but the detrimental reliance.
Thus, the courts see Estoppel as a form of obligation which operates alongside contract – distinguishable in the
determination of questions of liability and remedy. It is often pleaded as an alternative to contract.
Estoppel in formation (pre-contract negotiations)
[37]Estoppel may play a part in negotiations to enter into a contract and contract formation. Examples include:
Representor induces the Relying Party to believe an offer will not be revoked, and the Relying
Party suffered a detriment in reliance on this assumption.
In Australian law, this offer will not become irrevocable. However, it will raise equity, which
may be satisfied through other relief.
Waltons Stores (Interstate) Ltd v Maher:
Common-Law Estoppel brings contract into effect.
Equitable Estoppel raises equity, which may be given effect by enforcing the contract.
However, it is sometimes hard to establish Estoppel in pre-contract negotiations, for two reasons:
1. Parties should reasonably expect that they cannot rely on representations until a contract has been
formally concluded.
2. Courts are reluctant to find an estoppel arising unless all terms have been settled.
These problems are demonstrated in Austotel v Franklins Selfserve.
Privity (Estoppel)
[38]Estoppel can be raised when a contractual right has been denied because of the privity rule.
A non-party who has been led to believe that they are a party (or will receive a benefit under the
contract) may be able to establish an estoppel
A Representor who is a non-party will become liable against estoppel if he induced a Relying Party
to believe he will abide by the terms of the contract.
Of course, the estoppel will only be raised if the Relying Party acted to its detriment on the faith of this
assumption as per the usual laws of estoppel.
Formalities
[39]Equitableestoppel may also provide relief where a contract is unenforceable because it fails to comply with
formal requirements laid down by statute.
Contract Variations
[40]Estoppel often operates when a Representor induces the Relying Party to believe that a contract has or will
be varied, or that a certain term will not be enforced.
Pre-contractual variations
[41]Sometimes, a party only enters a contract under the assumption that a particular term will not be strictly
enforced (or be interpreted in a particular way), and will suffer detriment of the other party is able to enforce
the contract as per the written terms. In such a case, an Equitable Estoppel will arise. For example, Anaconda
Nickel Ltd v Edensor Nominees Pty Ltd.
Estoppel by convention
[42]Estoppel by convention holds parties to the assumed facts agreed upon for the purposes of the transaction in
question. The estoppel may operate by virtue of an express term of a contract (which indicates they take certain
facts to be true), or sometimes merely on the basis of a common assumption which has been adopted as to the
factual basis of the contract.
The parol evidence clause
The[43] parol evidence rule prevents the admission of evidence that subtracts from, adds to, varies or
contradicts the terms of the written document. The parol evidence rule is justified accordingly:
1. All discussion of terms during the negotiation state should be treated as superseded by the written
agreement.
2. A written agreement that appears to be final and complete should be granted special status so that
parties can regard it as secure and certain.
3. An investigation into what the parties have agreed or intended during negotiations is often time
consuming and inconclusive.
There is a debate whether this rule extends to the establishment of Estoppel in pre-contractual negotiations.
Obviously, if external evidence cannot be taken into account, it is very hard to establish Estoppel in pre-
contractual variations.
The general rule is that external evidence of pre-contractual negotiations will not be taken into account. This
was established by the courts in decision such as Johnson Matthey Ltd v AC Rochester Overseas Corp[44] and
Skywest Aviation Pty Ltd v Commonwealth[45].
However, if the external evidence is supported by clear and convincing proof, it can be used and Estoppel can
be established. This was decided in Whittet v State Bank of New South Wales[46].
Entire agreement clauses

[47]An entire contract clause provides that the written contract constitutes the entire agreement between the
parties, and that no promises or representations have been relied on.
An entire agreement clause thus prevents the establishment of an Estoppel by creating Estoppel against the
Relying Party.
A Relying Party, who has entered into the contract based on an assumption induced by the
Representor, is estopped from claiming it was relying on an assumption, by virtue of the entire
agreement clause.
Post-contractual variations (breach of contract as detriment)
[48]Post-contract variations often involve a situation in which the Representor undertakes an additional
obligation or releases the Relying Party from a contractual right without receiving anything in return. In
Estoppel, the crucial issue is whether the Relying Party has acted on the Representor’s promise in such a way
that it a detriment if the Representor does not adhere to the promise.
In these cases, it is possible that a Relying Party is better off breaching the contract and paying damages instead
of performing the contract. The question is then asked, whether the Relying Party can claim to have suffered a
detriment by performing the contract (in reliance on the representation) rather than breached the contract and
paid damages.
However, since breaching a contract is an unlawful act, a party is not entitled to breach it, even on offering to
pay damages. Therefore, there is no such thing as ‘the opportunity to breach the contract’, and a party cannot
claim to have suffered a detriment for ‘forfeiting’ it. This was established in Coulls v Bagot’s Executor and
Trustee Co Ltd.
Termination of contracts (estoppel)
[49]Estoppel with relation to post-contractual variations can apply to termination too. This means that if the
Representor induced the Relying Party to believe that he will not exercise his right to terminate, and the
Relying Party acts to his detriment on the faith of that assumption, the Representor will be estopped from
terminating the contract.
Estoppel as an alternative to contract
[50]In Australia, Estoppel cannot be established if the reliance was made on an enforceable contractual promise
(that is, if the promise was legally binding within a legally binding agreement). If a promise has been given
valid consideration for, then there is a contract and no Estoppel. There are two reasons for this:
1. A Relying Party cannot claim to have ‘suffered a detriment’ if he now has an enforceable
contractual right.
2. Equity is a supplement to the Common-Law. If the Common-Law can supply a remedy through
contract, there is no reason for equity to intervene.
Thus, Estoppel comes in when no remedy can be given through contract.
Estoppel and misrepresentation
[51]Estoppelis different from the principles of misrepresentation and the statutory prohibition on misleading or
deceptive conduct.
Estoppel is concerned with inconsistent conduct. Accordingly, Estoppel will only arise in a case of a
misrepresentation when there is harm caused from an attempt by the Representor to depart from the
assumption.
Why protect reliance?

[52]The reason behind protecting reliance is that it is unconscionable for a Representor to act inconsistently
with an assumption which they have induced the Relying Party to rely upon.
It has also been said that reliance shows that the promise was serious, and Estoppel is a way to
enforce serious promises.
A third explanation is that estoppel is essentially concerned with protecting against harm. This
view sees estoppel as analogous to tort.
However, the courts tendency towards granting expectation-interest relief weakens the power of
the latter two arguments, which would favour reliance-interest based relief.
Other suggestions are that Estoppel provides is a deterrent against harm caused by detrimental reliance on
promises. The protection provided by Estoppels also encourages efficient reliance on promises.
Promissory estoppel is justified because it encourages beneficial reliance on promises by providing protection
against the harm that can result from reliance.
How should reliance be protected?

Promise, unconscionability and reliance
These[53] three theories (which underpin the principle of Estoppel) point as to how Estoppel should operate:
1. Promise: the relief granted in Estoppel is usually the enforcement of the promise
2. Unconscionability: an essential element
3. Detrimental Reliance: limiting test for the determination of liability
Economic efficiency
[54]Economic efficiency is also used by commentators as a guide with regards to how Estoppel should operate.
One argument is that economic efficiency justifies only the enforcement of promises that further
economic activity.
Another opinion is that liability should be imposed on the party who is best placed to ensure that
reliance occurs at the optimum time, in order to balance the benefits of early planning against the
pitfalls of relying too early.
References
Textbook refers to Paterson, Robertson & Duke, Principles of Contract Law (Lawbook Co, 3rd ed, 2009)
5. ↑ Textbook, pp. 142 [9.10], 143-144 [9.25]

1. ↑ Textbook, pp. 141-2 [9.05] 6. ↑ Textbook, pp. 143-144 [9.25], 144-145 [9.30]
2. ↑ Textbook, pp. 142-3 [9.10] 7. ↑ Textbook, pp. 143-144 [9.25], 144-145 [9.30]
3. ↑ Textbook, pp. 142 [9.10] 8. ↑ [1947] 1 KB 130
4. ↑ Textbook, pp. 142 [9.10], 143 [9.20] 9. ↑ Textbook, pp. 144-145 [9.30]
10. ↑ (1854) 5 HLC 185; 10 ER 868 33. ↑ Textbook, p. 165 [9.160]

11. ↑ Textbook, pp. 147 [9.45], 147-149 [9.50] 34. ↑ Commonwealth v Verwayen (1990) 170 CLR
12. ↑ (1998) 81 FCR 475, 515 394, 445
13. ↑ Textbook, pp. 149 [9.55], 149-150 [9.60] 35. ↑ Textbook, pp. 165-6 [9.165]
14. ↑ Textbook, p. 149 [9.55] 36. ↑ Textbook, p. 166 [9.170]
15. ↑ (2001) 112 FCR 182 37. ↑ Textbook, p. 167 [9.175]
16. ↑ Textbook, pp. 150-1 [9.65] 38. ↑ Textbook, pp. 168-9 [9.180]
18. ↑ Textbook, pp. 151-4 [9.70] 40. ↑ Textbook, p. 169 [9.190]
19. ↑ Textbook, pp. 152-3 [9.65] 41. ↑ Textbook, p. 169 [9.190]
22. ↑ Textbook, pp. 155-6 [9.90],[9.95] 44. ↑ (1990) 23 NSWLR 190
23. ↑ (1988) 13 NSWLR 466 45. ↑ (1995) 126 FLR 61
24. ↑ Textbook, pp. 156-7 [9.100] 46. ↑ (1991) 24 NSWLR 146
25. ↑ Textbook, pp. 157 [9.105] 47. ↑ Textbook, pp. 171-2 [9.210]
27. ↑ Textbook, pp. 159-61 [9.120], [9.125], [9.30] 49. ↑ Textbook, p. 173 [9.225]
28. ↑ Crabb v Arun District Council [1976] 1 Ch 50. ↑ Textbook, p. 173 [9.220]
179 51. ↑ Textbook, pp. 173-4 [9.230]
30. ↑ (1990) 170 CLR 394, 443 53. ↑ Textbook, p. 175 [9.240]
32. ↑ Textbook, pp. 164-5 [9.155]
Retrieved from "http://www.unistudyguides.com/index.php?title=Estoppel&oldid=18205"
Category: LAWS1150
This page was last modified on 19 March 2013, at 18:36.

This page has been accessed 218,264 times.

Estoppel - Uni Study Guides

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Estoppel - Uni Study Guides

Uploaded by

Copyright:

Available Formats

09/12/2019 Estoppel - Uni Study Guides

This article is a topic within the subject Principles of Private Law.

10.1 Promise, unconscionability and reliance

The nature of estoppel by conduct

Representor – party making a representation which induces another party

There are two kinds of estoppel by conduct:

Common Law Estoppel

Central London Property Trust Ltd v High Trees House Ltd[8]:

Waltons Stores (Interstate) Ltd v Maher:

History of Estoppel - fact and future conduct

There are two types of loss:

Types of detrimental reliance

[18]There are different forms of detrimental reliance:

Expenditure of money (usually on improvements to land or in preparation for a contract)

Relying Party’s circumstances

Detriment must be material

[21]Thescope of Estoppel is limited by the mechanism of reasonableness. The reasonableness requirement is

1. Reasonableness of the assumption

The Reasonableness inquiry

1. The type of conduct engaged in by the Representor

[22]Thescope of Estoppel is also limited by the mechanism of unconscionableness. The requirement of

Departure or threatened departure

Common-Law Estoppel may be used both defensively and offensively:

Satisfying the ‘equity’

Reliance interest and expectation interest

The ‘interests’ of the Relying Party can be seen as twofold:

Development of the approach

Recognises expectation interest

Current approach - conclusion

1. Where the detriment can be quantified accurately

These three reasons will be explained further below:

Previous acceptance of Estoppel as a cause of action

Estoppels arising from future conduct

A promises to transfer a car to B but fails to do so.

Estoppel and Contract Law

Estoppel in formation (pre-contract negotiations)

These problems are demonstrated in Austotel v Franklins Selfserve.

The parol evidence clause

Entire agreement clauses

Post-contractual variations (breach of contract as detriment)

Termination of contracts (estoppel)

Estoppel as an alternative to contract

Thus, Estoppel comes in when no remedy can be given through contract.

Estoppel and misrepresentation

Why protect reliance?

How should reliance be protected?

5. ↑ Textbook, pp. 142 [9.10], 143-144 [9.25]

10. ↑ (1854) 5 HLC 185; 10 ER 868 33. ↑ Textbook, p. 165 [9.160]

This page was last modified on 19 March 2013, at 18:36.

You might also like