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Agency by Estoppel

A situation in which a reasonable person may assume agency agreement exists when it does not. For example, if a person or company allows another person or company to use proprietary letterhead to send out correspondence, agency by estoppel may exist. Because the agency is assumed, the (presumed) principal may be legally bound by the agent's actions.


A doctrine that stops one from denying facts or taking a course of action because it would be unfair under the circumstances.It may be because someone else relied on former statements regarding the facts or because someone else relied upon a situation allowed to exist by a party, so that the party cannot now be allowed to change that situation.The concept commonly arises in three situations:

1. Before the sale of an income-producing property, the tenants sign estoppel certificates acknowledging they have no claims against the landlord, no defenses to any of the terms or conditions of their lease, and no outside or “side” agreements varying the terms of the lease. After the sale, the tenant cannot claim otherwise, even if all parties agree that there has been a wrong done to the tenant by the prior landlord and the tenant would otherwise be able to cancel the lease if it were not for the estoppel certificate.

2. A subdivision with restrictive covenants grows lax in the enforcement of them and per- mits many violations over the years regarding, for example, parking boats and motor homes in driveways. If one buys a home in the subdivision and keeps a motor home in the driveway, the principle of estoppel will prevent the homeowners association from suddenly deciding to enforce that particular covenant.

3. A government employee tells someone one thing, and it later turns out to be wrong. The citizen has already taken action on the incorrect information. In most circumstances, courts will not allow estoppel against a government or government agency.

References in periodicals archive ?
proposition that a promissory estoppel is raised only when the promisee
To that end, a civil trial presents exactly the same risks to the summary suspension hearing's procedures if collateral estoppel is enforced.
The basic purpose of equitable estoppel is to prevent a party from taking unfair advantage of another party by inducing that party to rely on the contract and then later seeking to avoid the contract's burdens.
In such cases, the cause of action estoppel forces the plaintiff to provide sufficient evidence to prove both remedies.
The amici also note important policy considerations against coverage by estoppel, including permitting insurers to accurately appraise their exposure and avoiding increased premiums.
408) Judge Posner did yeoman service for the law in a cogent opinion that reviewed the doctrines and marked off the content, differences, and labels between equitable estoppel and equitable tolling.
It creates a correspondingly broad estoppel, covering any claim of invalidity that was raised or reasonably could have been raised in the proceedings.
Indeed, there was no need for the Engle III court to distinguish between claim preclusion and issue preclusion--neither phrase appears anywhere in the opinion--because the court stated unequivocally that the Phase I findings would have "res judicata effect," not "collateral estoppel effect," and defined precisely what res judicata meant in this context.
The elements of equitable estoppel are (1) a representation as to a material fact that is contrary to a later-asserted position, (2) reliance on that representation, and (3) a change in position detrimental to the party claiming estoppel, caused by the representation and reliance thereon.
Collateral estoppel is defined in Black's Law Dictionary as the "binding effect of a judgment as to matters actually litigated and determined in one action on later controversies between the parties involving a different claim from that on which the original judgment was based.
The district court also rejected Dickow's equitable estoppel argument, holding that "the doctrine of equitable estoppel cannot be used to extend the time to file a tax refund claim.