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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 ?
Similar to institution being on a claim-by-claim basis, estoppel applies on a claim-by-claim basis.
Because a PGR can be based on any statutory ground of unpatentability, its estoppel is arguably the harshest.
A fourth species of estoppel involved a slight retreat from Jorden v Money.
The first seven decades were wholly unremarkable for equitable estoppel in Australia.
As such, these decisions can form the basis for a claim of collateral estoppel in a later proceeding.
For many years, collateral estoppel remained limited in application because of the requirement of mutuality.
Elements or essentials of such estoppel include change of position for the worse by party asserting estoppel; conduct by party stopped such that it would be contrary to equity and good conscience for him to allege and prove the truth; false representation or concealment of facts; ignorance of party asserting estoppel of facts and absence of opportunity to ascertain them; injury from declarations, acts, or omissions of party were he permitted to gainsay their truth; intent that representation should be acted on; knowledge, actual or constructive, of facts by party stopped; misleading person to his prejudice; omission, misconduct or misrepresentation misleading another.
Without question, equitable estoppel is a traditionally and "preeminently" (62) equitable theory with deep roots in the law of trusts.
Analysis of the effects of cause of action estoppel has three major methodological goals: (a) to reexamine the rule in light of the behaviour modification model.
The article shows that, in many cases, the cause of action estoppel rules have undesirable effects on the conduct of litigation, including stimulating overlitigation in the initial action.
Instead of looking to tort, they should instead have turned to equity and the doctrines of estoppel contained therein.
It is settled that an estoppel by convention may arise where parties to a transaction act on an assumed state of facts or law, the assumption being either shared by them both or made by one and acquiesced in by the other.