Waiver by estoppel: Difference between revisions

Waiver by estoppel (view source)

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 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 '''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]].
+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]]. The representation must be some kind of positive act: simply not enforcing a term does ''not'' give rise to an [[estoppel]] or a [[waiver]]:
+{{quote|“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>}}
 '''Reliance''': The beneficiary must actually rely on the [[representation]] to its detriment ...
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 So: a ''[[contract]]'', some kind of ''[[representation]]'' and a ''reliance'' on it to the representee’s detriment.
 ===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.
 Codified common sense, really.
-===Observations===
-*'''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.
 {{course of dealing vs waiver}}
 {{waiver chains}}