Equitable estoppel is the court’s denial to grant a judgment or other legal remedy to a plaintiff due to the plaintiff’s lack of compliance with the legal rendering. The court would prevent someone from using any evidence that is different to what they originally said or did. Equitable estoppel can also apply to the revocation of a plaintiff’s rights should he or she have misrepresented him or herself to the defendant, fraudulently hid material facts, or failed to have provided valid proof to substantiate the claim.
A judgment is a court imposed nonconsensual lien that allows a winning plaintiff of a claim to place a lien on a defendant’s property for owing an unpaid debt. In the context of real estate, this may occur when a party provides false information about a potential property with the intent to confuse or defraud the other party. In the event the court finds the other party guilty of intentionally misleading the other party, the court will deny the plaintiff’s request for judgment.
When Equitable Estoppel is Utilized
Equitable estoppel is a legal doctrine that allows a party to claim a defense in a contract that bars one party from taking advantage of another party. Essentially the party taking advantage of another is “estopped” or prevented from continuing the act. This concept is found within the statute of frauds. It forfeits the right of the party doing the damaging from changing their position.
To prove equitable estoppel the guilty party must prove one or more of the following:
The damaging party concealed facts
The damaged party was not aware of the facts
The party being represented must have reasonably relied on the information presented to them
The party being represented must not have had the proper material facts to act in their own best interest
The main component of equitable estoppel is that the party being represented could not make the best decisions for themselves because they never had the required information to make proper decisions.
Example
Travis, a landlord, and Dorothy, a retail store owner, are in negotiations for the rental space of a large retail space. Travis gets the sense that Dorothy is not interested and tells Dorothy that AMC movie theatres and a few big name restaurants are moving into the shopping center. Dorothy agrees to rent the rental space based on the fact that she believes the larger companies will attract business to her store. Months turn into years and none of the large retailers rent the space at the shopping center. Dorothy stops making payments and the Travis brings legal action against Dorothy for breach of lease for failure to make rental payments. Does Dorothy have a claim to stop making payments?
Yes, Dorothy may have the right to suspend making further rental payments and/or potentially terminate the contract because Travis’s contention that other large businesses would be leasing space at the shopping center induced her to take the lease of the property.
