In the world of business, trust and fairness are everything. That’s where estoppel comes in. It’s a legal idea that says: “If you make a promise, and someone relies on it, you shouldn’t suddenly go back on your word, especially if it causes them harm.”
Think of it as a way the law says: “That’s not fair, stand by what you said.”
What exactly is Estoppel?
Estoppel is a rule/legal doctrine that stops someone from denying or going back on a promise or statement if another person has believed them and acted on it and lost something in the process.
In simple terms: If you make a promise, and someone takes action because of that promise, the law may stop you from breaking it, even if it wasn’t in writing.
Types of Estoppel
1. Promissory Estoppel – “You promised, and I acted”
This happens when someone makes a promise (spoken or written), and the other person relies on that promise to make a decision.
Example: A wholesaler tells a shop owner: “If you buy more than 50 gallons of cooking oil, I’ll give you a 10% discount. The shop owner buys 51 gallons. Later, the wholesaler says, “Sorry, no discount for you.”
That’s unfair! The shop owner only bought that much because of the promise. So, promissory estoppel might kick in and stop the wholesaler from breaking their word.
2. Proprietary Estoppel – “You said I’d get the land, so I started building!”
This happens when someone is promised land or property, and they spend time or money based on that promise.
Example: An uncle tells his nephew: “I’ll give you a piece of my land to build your school”. The nephew believes him, clears the land, and starts building. Later, the uncle says, “I changed my mind. Get off my land.”
The law may say: “Not so fast. You can’t just change your mind after he relied on your promise.”
That’s proprietary estoppel in action.
When Does Estoppel Apply?
For estoppel to work, 3 things usually have to happen:
- A clear promise or statement was made. (Even if it wasn’t written down.)
- Someone believed it and relied on it. (They took action based on your word.)
- They suffered a loss or were harmed because of it. (They lost money, time, or opportunity.)
Why Should You Care?
Estoppel is not about punishing people for changing their minds. It’s about making sure business is fair, honest, and built on trust. So, if you’re a business owner, landlord, seller, or even just helping a family member with property: Be careful what you promise, because the law might hold you to it. Even if there’s no formal contract, your word can have legal power.
