Estoppel is an equitable doctrine. Usually as a defense, a party is prevented (or estopped) from successfully asserting what would or might otherwise be his legal rights.(e.g. of expression such as “you can’t now just turn round and say that”). For building contract purposes, it is appropriate to consider :
- Estoppel by representation
- Estoppel by convention, and
- Promissory estoppel.
Estoppel by representation
If a party makes a representation with the intention and effect of inducing another party to alter his position to his detriment in reliance on the representation, the party making the representation may be estopped from relying on facts which are at variance with the representation. The representation must be factual or an existing state of mind or belief and not a future promise. It must be unambiguous and unequivocal.
Estoppel by convention
Where parties have acted upon a common assumption of fact or law on the basis of which they have regulated their subsequent dealings, they will be estopped from subsequent denying that the assumption is true if it would be unjust or unconscionable to permit them to resile from it.
Where a party has made an unequivocal promise or representation to another party that he will not enforce his strict legal rights and the promise or representation is intended to be relied on and is in fact relied on, the first party may be estopped from successfully asserting his strict legal rights if it would be unconscionable or unjust to allow him to do so.