Precontractual Estoppel by Convention

Abstract

This article addresses the unresolved question as to whether estoppel by convention can arise from a precontractual understanding. Answering that question requires consideration not only of issues of fairness in contractual dealings and the need to protect the integrity of written contracts, but also the nature and history of estoppel by convention, the relationship between the common law and equity, and the need for consistency between analogous doctrines. I argue in this article that considerations of authority, justice and policy favour allowing estoppel by convention to arise from a precontractual understanding. An examination of the cases reveals an overlooked history: some of the foundational cases of estoppel by convention involved precontractual understandings. The difficult question is not whether estoppel by convention can arise from a precontractual understanding, but whether it can contradict a subsequent written agreement. Considerations of justice, including the need for consistency between analogous doctrines, favour allowing it to do so, while policy considerations do not provide a compelling case to the contrary.