California Business Lawyer Blog

Reliance-based estoppels--These involve one party relying on something the other party has done or said. The party who did/said the act is the one who is estopped. Under English law, this class includes estoppel by representation of fact, promissory estoppel and proprietary estoppel Although some authorities have used language to suggest reliance-based estoppels are mere rules of evidence, they are rules of substantive law.

Equitable Estoppels:

Estoppel by record--This frequently arises as issue/cause of action estoppel or judicial estoppel where the orders or judgments made in previous legal proceedings prevent the parties from relitigating the same issues or causes of action,
Estoppel by deed (often regarded as technical or formal estoppels)--Where rules of evidence prevent a litigant from denying the truth of what was said or done
Estoppel by silence--Estoppel that prevents a person from asserting something when he had the right and opportunity to do so earlier, and such silence put another person at a disadvantage.
Laches--estoppel in equity by delay. Laches has been considered both a reliance-based estoppel, and a sui generis estoppel.

Reliance-based estoppels

Reliance-based estoppels by representation of fact, where one person asserts the truth of a set of facts to another;promissory estoppel, where one person makes a promise to another, but there is no enforceable contract; and
proprietary estoppel, where the parties are litigating the title to land.
These three estoppels collectively known as estoppels by representation. More simply, one party must say or do something and see the other party rely on what is said or done to change behavior.

All reliance-based estoppels require the victimised party to show both inducement and detrimental reliance, i.e.:there must be evidence to show that the representor actually intended the victim to act on the representation or promise, or the victim must satisfy the court that it was reasonable for him or her to act on the relevant representation or promise, andwhat the victim did must either have been reasonable, or the victim did what the representor intended, and the victim would suffer a loss or detriment if the representor was allowed to deny what was said or done -- detriment is measured at the time when the representor proposes to deny the representation or withdraw the promise, not at the time when either was made, and in all the circumstances, the behavior of the representor is such that it would be "unconscionable" to allow him or her to resile.
Estoppel by representation of fact and promissory estoppel are mutually exclusive: the former is based on a representation of existing fact (or of mixed fact and law), while the latter is based on a promise not to enforce some pre-existing right (i.e. it expresses an intention as to the future). A proprietary estoppel operates only between parties who, at the time of the representation, were in an existing relationship, while this is not a requirement for estoppel by representation of fact.

The test for unconscionability takes many factors into account, including the behavior, state of mind and circumstances of the parties. Generally, the following eight factors are determinative says California Business Lawyer Steven C. Peck.

How the promise/representation and reliance upon it were induced;
The content of the promise/representation;
The relative knowledge of the parties;
The parties' relative interest in the relevant activities in reliance;
The nature and context of the parties' relationship;
The steps, if any, taken by the promisor/representor to ensure he has not caused preventable harm.