Waiver by estoppel: Difference between revisions

The other kind of [[waiver]]. The ''difficult'' one. Though not half as perilous as [[Mediocre lawyer|your earnest counsel]] may have you believe.

[[Waiver by estoppel]] is when a party is entitled to exercise contractual rights, but by its conduct leads the other party to believe it will not so that 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}}

*A clear [[representation]] by the rightsholder that it will not enforce its strict rights — it can be implied but it must be unequivocal<ref>Chitty muses that it needs to be as certain as would give it contractual effect if supported by consideration</ref> In any case the point here is to differentiate between someone representing that they will not enforce a contractual term — entitling a counterparty to rely on that representation — and simply granting an indulgence and not strictly enforcing a term. The latter will ''not'' give rise to a waiver.

*The beneficiary must rely on the representation to its detriment, so as to make it inequitable for the rightsholder to go back on the representation.

*'''A representation must be some kind of positive act''': Simply not enforcing a term does ''not'' give rise to an [[estoppel]] or a [[waiver]]: “It is difficult to imagine how silence and inaction can be anything but equivocal”<ref>{{casenote|Allied Marine Transport|Vale do Rio Doce Navegaçao SA (The Leonidas D.)}}</ref>.

*The [[estoppel]] is specific to the particular circumstance. If you have a recurring right (you know, like to make a [[margin call]]), then just because you waived it once — even if you somehow permanently waived it — that doesn't mean you have waived it for all time. Just because you didn’t enforce this time, that doesn’t mean you are prevented from ever enforcing in the future.