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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 ?
Courts generally apply collateral estoppel when four factors are met:
The party against whom collateral estoppel is asserted must have been a party or in privity with a party to the prior adjudication.
The party against whom collateral estoppel is asserted must have had a flail and fair opportunity to litigate the issue in the prior proceeding.
Upon meeting these four requirements, courts have held that a defendant may assert collateral estoppel to terminate a product liability suit based on a prior adverse workers' compensation ruling against the plaintiff.
The rule of cause of action estoppel and the rule against splitting a single cause of action are considered by many as a fundamental contribution to the efficiency of judicial proceedings.
The present article challenges the traditional assumption by introducing some of the economic and behavioural effects of the rule of cause of action estoppel, which have not been considered in earlier studies.
Part I, largely a repetition of an exposition from my previous article, presents an overview of the broad-scope common law model of RJ and the main arguments in favour of the rules of cause of action estoppel.
Consequently, in many cases the effect of the cause of action estoppel rules on the conduct of litigation is undesirable and injurious.
1984) (stating that "[a] corollary to the doctrine of collateral estoppel is the doctrine of mutuality of parties which holds that strangers to a prior litigation--those who were neither parties nor in privity with a party--are not bound by the results of that litigation.
1) The parties' dealings must have been based on a shared assumption of fact or law: estoppel requires manifest representation by statement or conduct creating a mutual assumption.
The party seeking to establish estoppel therefore has to prove that detriment will be suffered if the other party is allowed to resile from the assumption since there has been a change from the presumed position.
Does the concept of conventional estoppel explain the principled exception?