how estoppel works
common law is a form of law that is derived from judicial decisions and precedent this means that the laws aren t established or based on legislation or statutes most of the legal system in the united states was based on english common law that was until the country s legal system became developed enough to set precedent to shape its own form of common law almost all countries with a judicial system based on common law including the united kingdom canada and the united states have incorporated multiple forms of the doctrine of estoppel in their laws while the names of the principles differ from country to country the concept is essentially the same consistency in both words and actions matters as noted above estoppel legally prevents people from making contradictory claims or actions as opposed to something they may have said or done in the past in simpler terms estoppel ensures that a person stays true to their word and doesn t unfairly damage someone else so if person a must adhere to their word if they make a promise to person b and later rescind it estoppel can take many different forms the most common of which are listed below the action of preventing someone from going back on their word is referred to as estop the person being who goes back on their word is considered estopped types of estoppelthere are different types of estoppel the following are some of the most common ones found in the legal arena other lesser known forms of estoppel are estoppel by record estoppel by deed laches estoppel by silence and reliance based estoppel estoppel certificate componentsan estoppel certificate is common in the mortgage and commercial real estate industries it is a document that is often required by lenders and third parties if and when property owners either try to sell their properties that are tenanted or refinance a loan this document which is also called an estoppel letter is generally prepared by the landlord and is signed by the lessee or tenant in essence it verifies and asserts claims made to the third party either a lender or a buyer by the landlord some of the most common details included in the certificate or letter are example of estoppelpromissory estoppel was the heart of a case pitting two neighbors against one another in iowa a farmer leased property from his neighbor who he said promised to sell him his farm at some point in the future for 3 000 an acre 1the farmer then made substantial improvements to the property during the term of the lease with the expectation that he would become its eventual owner but the owner sold the property to a third party prompting his neighbor to file a lawsuit saying he had the right to purchase the farm 1at the trial the jury awarded the farmer 52 000 in damages to cover the improvements made to the property eventually the case found its way to the iowa court of appeals which ruled that the option for the farmer to purchase the farm did not need to be included in the written lease agreement to be valid the court stated that there was a clear and definite promise along with the neighbor s understanding that the farmer was relying on that promise as such the property owner was ordered to pay the farmer damages 1