What is an Estoppel?

Definition: An estoppel is a legal standard that prohibits that a previously issued statement about a subject can be contradicted or denied in the future. It is a way to avoid the unfair withdrawal of a certain opinion or claim that was already presented.

What Does Legal Estoppel Mean?

Estoppels are highly useful within the legal system. They avoid unfair attitudes that might weaken the legal procedure’s credibility. In a legal court, all statements made about a given subject are, usually, adequately recorded. This recording ensures that everything being said or presented can be reviewed in the future to avoid inconsistencies that can be used to manipulate the procedure’s result. There are many different types of estoppels like collateral estoppels, promissory estoppels or equitable estoppels, among others.

The purpose of each is slightly different depending on the situation being addressed. For example, collateral estoppels prevent a party to present the same claim more than once. This is a legal measure that aims to reduce abuses within the legal system. Promissory estoppels, on the other hand, forbid that a party backs off from a previously accepted commitment that triggered the beneficiary of the commitment to act upon what was promised.

Example

A non-governmental organization called Overseas Doctors is currently filing a claim against a certain company. The Foundation alleged that the company promised, through a letter of intention, that they will send a given amount of money in the next two months to help them finish a project they were developing in South America. Three months have passed and the Foundation hasn’t received the promised donation.

This has caused many problems to the organization since they took several financial commitments for the project that they now need to fulfill. In this case, a promissory estoppel might be considered, since there was an explicit promise made by the company to the Foundation, with a pre-established time period. The fact that the company made this promise motivated the Foundation to act upon it and that triggers the promissory estoppel.