Contracts - week 6 Estoppel,Estoppel The law isnt justice. Its a very imperfect mechanism. If you press exactly the right buttons and are also lucky, justice may show up in the answer. A mechanism is all the law was ever intended to be. - Raymond Chandler,1,Estoppel,The word estoppel comes from the old French word estoupail, meaning a plug or stopper. Common law is an older form of estoppel, and its operation is more consistent with the origin of the word. The estoppel stops up the mouth of the representor, preventing him or her from pleading the truth.,2,Estoppel,a party makes a statement, representation, promise or fosters an assumption; the other party relies to his or her detriment on the statement, representation, promise or assumption; and the first party wishes to act contrary to the statement, representation, promise or assumption, and this would be unconscionable in the circumstances.N Seddon and M Ellinghausen, Cheshire and Fifoots Law of Contract, (8th Edition, 2002) 62,3,Estoppel,Central London Property Trust v High Trees The landlord made a promise not to insist on being paid the full amount of rent for the duration of the war. The tenant relied on that promise. They could have moved into cheaper premises, or closed down altogether. They arranged their financial affairs on the assumption that the landlord would not enforce his legal right to the full amount of rent. In the case, the landlord didnt try to resile from his promise, but if he had tried to do so, then the estoppel would have arisen.,4,Types of Estoppel,Common law (aka estoppel in pais, estoppel by representation) Equitable Proprietory Estoppel Promissory Estoppel,5,Common Law Estoppel,party A leads party B to adopt an assumption of fact party B relies on the assumption the reliance means that B will suffer detriment if A subsequently denies the truth of the assumption party A tries to deny the truth of the assumption party A is estopped. Since Jordan v Money - only applies to a representation of existing fact - not to representation as to future conduct,6,Equitable Estoppel,Proprietory Estoppel party A leads party B to adopt an assumption that A will transfer interest in land to B party B relies on the assumption the reliance means that B will suffer detriment if A subsequently denies the truth of the assumption party A tries to deny the truth of the assumption party A is estopped. Can apply to representations about future conduct ie land will be transferred Only applies to transfer of interest in land,7,Equitable Estoppel,Promissory Estoppel concerned exclusively with promises not to enforce legal rights. Parties must be in a pre-existing legal relationship.,8,Estoppel - History,Pre-Jordan v Money Common law and Equitable estopple could arise re representations as to future conduct Post-Jordan v Money Common law estoppel only re representations as to existing facts. Equitable estoppel only re representations about transfer of interest in land (proprietory) or not to enforce existing legal rights (promissory) but could be about future conduct Post-High Trees Estoppel could be used as both sword and shield,9,Estoppel - History,Je Maintiendrai v Quaglia Expanded principle of promissory estoppel per High Trees does apply in Australia Estoppel is raised only if relying party demonstrates detriment - otherwise no inequity,10,Estoppel - Waltons v Maher,Mahers believed that Waltons had signed the lease, and therefore there was a binding contract between them. (common law estoppel) Mahers believed that Waltons had not signed the lease, but were legally bound anyway. (promissory estoppel) Mahers believed that Waltons would sign the lease and complete the transaction. (promissory estoppel),11,Estoppel - Waltons v Maher,Mahers believed that Waltons had signed the lease, and therefore there was a binding contract between them Deane and Gaudron JJ Assumption of factcommon law estoppel This would prevent Waltons from denying the assumption, meaning they could not deny that they had signed the lease,12,Estoppel - Waltons v Maher,Mahers believed that Waltons would sign the lease and complete the transaction. Mason CJ, Brennan and Wilson JJ. Assumption concerning future conduct Must be equitable estoppel, but problems fitting it into the doctrine of promissory estoppel: No pre-existing legal relationship, only pre-contractual negotiations. Mahers were using the estoppel as a sword, not a shield they were seeking to enforce a non-contractual promise rather than to defend a claim Waltons did not expressly represent that they would sign the contract. The representation must have been through their silence.,13,Estoppel - Waltons v Maher,No pre-existing legal relationship Mason and Wilson JJ said promissory estoppel could arise in the absence of a pre-existing legal relationship Mahers were using the estoppel as a sword, not a shield Brennan J, relying on High Trees, found that estoppel could be used as a swordWaltons did not expressly represent that they would sign the contract. The representation must have been through their silence. All the Justices found that silence was, in the circumstances, a form of representation which induced the Mahers assumptions,