What is equitable estoppel in California?

The doctrine of equitable estoppel prevents a party in a civil lawsuit from making a legal claim or asserting a defense which is contrary to, or inconsistent with, prior statements or conduct. The elements of equitable estoppel are: 1) an act or omission on the part of the party to be estopped; 2) reliance on that act or omission by the other party; and 3) it would be unfair if the party to be estopped is allowed to raise the argument or legal defense.

Author: Douglas Wade, Attorney

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The definition of Equitable Estoppel means a litigant may be stopped or prevented from raising an argument or defense in a lawsuit because of his prior action or statement, led another to believe a particular thing true and to act upon such belief. The doctrine of equitable estoppel is founded on principles of fraud. It prevents one party from taking a different position at trial.

In California, the element of equitable estoppel are: (1) the party to be estopped must know the facts, (2) he must intend that his conduct shall be acted upon, or must so act that the party asserting the estoppel had the right to believe that it was so intended, (3) the party asserting the estoppel must be ignorant of the true state of the facts, and (4) he must rely upon the conduct to his injury. Insurance Co. of the West v. Haralambos Beverage Co. (1987) 195 Cal.App.3d 1308, 1321.

Equitable estoppel is based on principles of fair play and essential justice and arises when one party lures another party into a disadvantageous legal position. Equitable estoppel is a defensive doctrine preventing one party from taking unfair advantage of another when, through false language or conduct, the person to be estopped has induced another person to act in a certain way, which resulted in the other person being injured in some way. Equitable estoppel is intended to prevent unfair outcomes.

In this article, our business attorney in San Jose discusses the definition and elements of equitable estoppel in California as follows:

1. Why is equitable estoppel important in law?

2. What are the four elements of estoppel?

3. What is the difference between estoppel and equitable estoppel?

Why is equitable estoppel important in law?

Estoppel is an equitable remedy whereby a court can stop someone from reneging on specific promises. The equitable estoppel doctrine is generally asserted as a shield by a defendant in court. Equitable estoppel is based on principles of fair play by preventing one party from taking unfair advantage of another. Equitable estoppel exists to try to ensure that businesses and individuals act and deal with each other fairly. The equitable doctrine prevents a party in court from arguing a fact that contradicts what they previously said or agreed to by law.

What are the four elements of estoppel?

Supreme Court stated the four basic elements of promissory estoppel: (1) the part to be estopped must be apprised of the facts; (2) he must intend that his conduct shall be acted upon, or must so act that the part asserting the estoppel had a right to believe it was so intended; (3) the other party must be ignorant of the true state of facts; and (4) he must rely upon the conduct to his injury. Lentz v. McMahon (1989) 49 Cal.3d 393.

In other words, the party asserting equitable estoppel has to show and prove the following elements:

The party that will be halted (estopped) must understand the facts of the case
The party must mean to act upon their conduct and intend to carry out the actions
The party using the doctrine of estoppel must be uninformed of the true nature of facts
The party must rely on the conduct of the party that went back on their word

What is the difference between estoppel and equitable estoppel?

Equitable estoppel is used as a shield by a party. Promissory estoppel is use as a sword by a party to enforce a promise. Promissory estoppel is a doctrine in contract law that stops a person from going back on a promise even if a legal contract does not exist. This form of estoppel prevents someone from taking a legal position that is contrary or inconsistent with their previous stance if doing so harms the other party.

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