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Waiver by estoppel: Difference between revisions
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[[Waiver by estoppel]] may arise when a party who is entitled to exercise contractual rights, by its conduct ''leads the other party to believe it will not'', so that ''the other party relies on that representation'' to its detriment. It is an outflowering of the great case of {{citern|Hughes|Metropolitan Railway|1877|2 App. Cas.|439}}. | [[Waiver by estoppel]] may arise when a party who is entitled to exercise contractual rights, by its conduct ''leads the other party to believe it will not'', so that ''the other party relies on that representation'' to its detriment. It is an outflowering of the great case of {{citern|Hughes|Metropolitan Railway|1877|2 App. Cas.|439}}. | ||
===Ingredients=== | |||
For us to even be in the ballpark, you need: | |||
A '''Relationship''': A legal relationship — maybe a [[contract]], maybe something statutory — between the “rightsholder” and the “beneficiary” creating the rights and obligations; | |||
A '''Representation''': A clear [[representation]] by the rightsholder that it will not strictly enforce its rights — the representation need not be written or explicit, but it must be ''unequivocal''<ref>Chitty muses that it needs to be as certain as would have given it contractual effect had it been supported by [[consideration]].</ref> In any case, the point here is to differentiate between someone unambiguously giving the impression that they will not enforce a contractual term — entitling a counterparty to rely on that representation — and a rightsholder simply ''refraining from enforcing a term of the contract it was entitled to''. The latter will ''not'' give rise to a [[Waiver by estoppel|waiver]]. | |||
'''Reliance''': The beneficiary must actually rely on the [[representation]] to its detriment ... | |||
'''Inequity''': ... so as to make it ''inequitable for the rightsholder to go back on the [[representation]]''. | |||
So: a ''[[contract]]'', some kind of ''[[representation]]'' and a ''reliance'' on it to the representee’s detriment. | |||
===Effect=== | ===Effect=== | ||
*Unlike [[waiver by election]], generally a [[waiver by estoppel]] only suspends the rightsholder’s legal rights and does not permanently extinguish them — unless it would be inequitable to allow the waiver to be withdrawn. So (as per {{citern|Hughes|Metropolitan Railway|1877|2 App. Cas.|439}}, if your tenant is obliged to repair the property within six months of your notice and, having given notice, you then [[Representation|represent]] you won’t insist on it doing so while you negotiate the potential sale of the property to the tenant, when those negotiations inevitably fall through and you decide you ''do'' want your property repaired after all, you can’t insist on the tenant getting everything done in the remaining two weeks of the original notice period. Instead, the six month period is reset from when you give further notice of the repairs. | *Unlike [[waiver by election]], generally a [[waiver by estoppel]] only suspends the rightsholder’s legal rights and does not permanently extinguish them — unless it would be inequitable to allow the waiver to be withdrawn. So (as per {{citern|Hughes|Metropolitan Railway|1877|2 App. Cas.|439}}, if your tenant is obliged to repair the property within six months of your notice and, having given notice, you then [[Representation|represent]] you won’t insist on it doing so while you negotiate the potential sale of the property to the tenant, when those negotiations inevitably fall through and you decide you ''do'' want your property repaired after all, you can’t insist on the tenant getting everything done in the remaining two weeks of the original notice period. Instead, the six month period is reset from when you give further notice of the repairs. | ||