Estoppel statement: Overview, definition, and example
What is an estoppel statement?
An estoppel statement refers to a formal declaration made by one party in a legal proceeding, which prevents that party from taking a position or making a claim that contradicts their previous statements, actions, or established facts. Estoppel is a legal principle that bars a person from asserting something contrary to what has already been established by law or by their own conduct. An estoppel statement is used to assert that, based on prior conduct, statements, or representations, a party cannot now deny certain facts or claims.
For example, if a person has previously made a statement in court acknowledging that they owed money to another party, they cannot later claim they do not owe the money, due to the estoppel principle.
Why is an estoppel statement important?
An estoppel statement is important because it promotes fairness and consistency in legal proceedings. It ensures that parties do not change their position or make contradictory claims after taking specific actions, making statements, or leading others to reasonably believe a certain set of facts is true. This prevents parties from using inconsistent arguments to gain an unfair advantage or to avoid obligations they have already accepted.
For businesses, individuals, and organizations, estoppel statements help ensure that legal rights and obligations are respected and that parties cannot easily change their positions to avoid liability or responsibility. For the judicial system, estoppel maintains the integrity of legal proceedings by preventing fraud, deception, and injustice.
Understanding estoppel statement through an example
Imagine a landlord and a tenant who enter into a lease agreement. The landlord accepts rent payments late several times and, in doing so, leads the tenant to believe that paying rent late is acceptable. However, the landlord later attempts to evict the tenant for not paying rent on time. The tenant could argue an estoppel statement, asserting that the landlord’s prior acceptance of late payments prevents them from now enforcing the strict terms of the lease.
In another example, a person who previously declared in writing that a piece of land was free from encumbrances could not later claim that there were liens or restrictions on the property when selling it, because of the estoppel principle.
An example of estoppel statement clause
Here’s how an estoppel statement clause might appear in a contract or agreement:
"The Parties acknowledge that, by entering into this Agreement and proceeding with the actions described herein, neither Party shall assert any claims or defenses that contradict prior representations, statements, or conduct, including but not limited to prior written acknowledgments or statements made by either Party regarding the subject matter of this Agreement."
Conclusion
An estoppel statement is a key legal tool that prevents a party from taking a position or making claims that contradict their previous actions, statements, or established facts. By ensuring consistency in legal matters, estoppel helps to maintain fairness and integrity in legal proceedings, protecting parties from contradictory or fraudulent claims. Whether in business, real estate transactions, or other legal agreements, estoppel statements ensure that actions, representations, and conduct are honored, preventing parties from later denying previously accepted facts or agreements.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.