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Contract Law_ Estoppel Questions with 100% correct answers | verified | latest update 2024
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Contract Law_ Estoppel Questions with 100% correct answers | verified | latest update 2024
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Contract Law: EstoppelWhat is the doctrine of Estoppel?
prevents individuals from making an assertion or claim, even by actions or behavior, and
later denying it.
1. Estoppel by Representation (Traditional Estoppel)
=> where the statement made is one of existing fact
e.g.
I say "X does not owe me €100";
I will at common law be estopped from denying the truth of this declaration.
AS OPPOSED TO
me saying "you owe me €11 but pay me €6; I do not intend at any time to recover the
balance";
this is a statement of intention in law = Estoppel will not operate.
What is the effect of the traditional estoppel approach?
EXCLUSIONARY
= promisor is estopped from pleading or introducing facts which vary or contradict the
representation already made.
Traditional Estoppel per L.Birkenhead in Maclaine v Getty [1921]
Where A has by his words or conduct justified B in believing that a certain state of facts
exists, and B has acted upon such belief to his prejudice, A is not permitted to affirm against
B that a different state of facts existed at the same time.
Jorden v Money (1854)
Facts -
Promisor led promisee to believe that she would not seek to recover a debt. Consequently
promisee took on family commitments which he submitted he would not otherwise have
done (cause costly), and he sought a declaration that the debt was irrecoverable.
Legal Issue -
is the promisor estopped from recovering debt?
Judgement - NO
,=>DoE by representation only operated on statements of existing FACT and not statements
of LAW / representations of future intentions
McNeill v Miller [1907]
Facts -
P left car at D's garage for repair. P was told that the Ds had insurance cover and, acting on
this, did not obtain separate insurance. When the car was destroyed by fire it turned out the
D did not actuallly have insurance; P sued
Legal Question -
Is P entitled to sue for insurance?
Judgement -
=> no contract of insurance existed; so technically D could claim that P had no right to
insurance costs
BUT
=> estopped from doing this because
there had been a MISREPRESENTATION OF FACT upon which P had acted.
Precise phrasing of L.O'Brien in McNeill
"There was a representation made that a certain stage of things existed in point of fact"
Doran v Thomas Thompson & Sons Ltd [1978]
Facts -
P employed by D, injured at workplace. P's solicitor begin correspondance w D's insurer wrt
medical examination, so P initially doesn't take action against D. When he does eventually, it
falls outside time period imposed by Statute of limitations.
Legal Issue -
Are the Ds estopped by their conduct from relying on SoL Act?
, => P contested that words and conduct of the defendants' insurers led the P's solicitor to
believe that the case was a clear one: liability would not be contested, and would be settled
without instituting proceedings.
Judgement - no
=> the promise/assurance made by words or conduct must be
CLEAR and UNAMBIGUOUS , intended to affect legal relations
=> the party must have acted upon it, altering his legal position
to his own DETRIMENT
N.B. in this case, D (+insurers) never accepted or admitted liability and never represented
that they did; on facts nothing in their conduct implied this
=> Silence may amount to a representation ONLY when there is a duty to disclose and the
silence is deliberate.
The Governor & Company of the Bank of Ireland -v- Reilly & Anor [2023]
affirmed the principle in Doran:
the party seeking to invoke estoppel must demonstrate that they relied on the representation
to their DETRIMENT
Promissory Estoppel (6 key points)
triggered when a claimant has acted to her detriment on the basis of a promise that another
party will not enforce his strict
Key points:
1. may be by words or conduct.
2. must be clear and unambiguous
3. Shield; not sword
4. must be inequitable for promisor to retract promise
5. detrimental reliance is necessary
6. doctrine suspends legal rights
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