Equitable estoppel protects parties who rely on the actions of others, including silence or concealment of facts. It prevents parties from denying facts settled in court and making contradictory claims. Promissory estoppel applies to contract law and can compel parties to complete a contract to avoid harm.
Equitable estoppel, sometimes referred to as estoppel in pais, is a legal doctrine that protects one party from the willful and harmful actions of another party. The concept is based on ensuring fairness to those who have relied on the actions, passive or overt, of another person or entity. Such actions include statements of fact, contractual assertions, refusal to act in a timely manner, acquiescence, concealment of facts, and silence. The equitable estoppel also prevents a party from denying facts in subsequent lawsuits that have already been previously settled in a court of law.
The fairness argument for foreclosure is usually raised in civil proceedings. One such area is the issue of paternity, child support, and custody lawsuits. For example, Susan and John may have been married for five years, during which time a daughter was born. Susan has been secretly involved with Sam, one of her co-workers, and she believes that he is the father of her child. She remains silent about this possibility however and lists John as the father on the baby’s birth certificate. John and his daughter develop a close and loving relationship.
Eventually Susan files for divorce so she can marry Sam. The court awards joint custody and requires John to pay child support. Later, Susan files a court petition to strip John of parental rights, claiming that he is not the father of the child. In this case, the equitable impediment doctrine can be used to deny Susan’s claim. John can successfully press her parental rights based on Susan’s prior acquiescence regarding his paternity and her overt actions of listing John as the father on the birth certificate and seeking child support upon divorce.
The equitable estoppel is also used to prevent one party from making contradictory claims in court. If a party sues someone for facts that have caused damage, he cannot subsequently present a different claim for the same damage against a totally extraneous party. For example, a teacher who is fired wins a furlough lawsuit against the school principal and a colleague claiming that he was fired due to discrimination. He may later file a lawsuit against a neighbor, claiming that the neighbor harassed the school and defamed his character, causing him to lose his job. He may be barred from pursuing the second lawsuit as those claims contradict his testimony in the first lawsuit.
Promissory estoppel is a form of equitable estoppel that applies to contract law. This is most frequently used to compel an entity to complete a contract when failure to do so could cause significant harm to the other party. For example, a large company orders a significant amount of material from a small chemical company. To meet the contract deadline, the chemical company invests in additional equipment and supplies and turns away other customers. If the buyer refuses to complete the purchase, the supplier can file a motion asking the court to perform the contract in the form of foreclosure.
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