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Related to Promissory estoppel: Detrimental reliance, Equitable estoppel

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


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.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
Even if promissory estoppel is strictly a defence, legal and
The court then noted that it had referenced the elements of promissory estoppel in Quake Construction, Inc v American Airlines, Inc, 141 Ill 2d 281, 309-10, 565 NE2d 990, 1004 (1990), as well as in earlier cases dating back as far as the 19th century.
The first says that promissory estoppel really just fixes gaps in contract enforceability caused by the hyperformality of common law contract formation doctrine.
The resolution of claims based on promissory estoppel is highly unpredictable, but generally a valid promissory estoppel claim consists of: (1) a clear and unambiguous promise, (2) reasonable and foreseeable reliance by the promisee, and (3) proximately resulting injury, sustained by the party asserting the claim.
Promissory estoppel can also be understood as a device for relaxing the consideration doctrine's prohibition on liability for precontractual reliance.
LEGAL COMMENTARY: To successfully make out a prima facie case of promissory estoppel, a party must demonstrate that a clear and unambiguous promise is made; that the party to whom the promise is made relied on it; that the reliance is reasonable and foreseeable; and that the plaintiff is injured as a result of the reliance.
Not too long ago, I published a short essay, The Death of Reliance,(42) in which I reported the scholarly consensus -- including such diverse writers as Daniel Farber & John Matheson, Juliet Kostritsky, Edward Yorio & Steve Thel, Mary Becker, and Michael Kelly(43) -- that had emerged over the past fifteen years or so, that detrimental reliance was not the key to understanding the doctrine of promissory estoppel. The scholarly literature on that point strongly suggested that detrimental reliance was not necessary to a promissory estoppel theory; its existence was not alone sufficient to support a promissory estoppel theory; and the measure of recovery in promissory estoppel cases was typically the expectation interest, not the reliance interest.
Dan Cohen, a campaign staffer, sued for breach of contract under a theory of promissory estoppel, which allows the court to enforce a promise between parties, as if there was a contract, to carry out the original intent of the parties or award damages if the contract could not be fulfilled.
The court rejected this contention, explaining Clevenger held that "if the facts would establish an express agreement for the maintenance of the child or an estoppel as to the child the husband would be liable for child support."(13) Thus, the court accepted two forms of virtual adoption -- either an express contract for adoption or a promissory estoppel in relation to the child.
Employees may try to prove the employer committed a breach of contract, based on the doctrine of promissory estoppel, breaking a promise that harmed the employee.