contract-law england-and-wales
What&#39;s a &quot;‘contract of estoppel’&quot;?
<p>I know what estoppel means. I just don't understand why the Taylors below and Mr Hume Williams can use "estoppel" in this case, <em>Scrivens</em>, because <em>Hindley &amp; Co.</em> never promised or undertook anything?</p>

<p>Ewan McKendrick. <a href="https://www.amazon.co.uk/Contract-Law-Text-Cases-Materials/dp/019880816X/ref=dp_ob_title_bk" rel="nofollow noreferrer"><em>Contract Law: Text, Cases, and Materials</em> (2018 8 ed)</a> p 214.</p>

<blockquote>
  <p>&nbsp; &nbsp; &nbsp; The word ‘stop’ in the middle gives a clue. The French original means ‘bung’ or ‘stopper’.
  It was when it came to bottling wines that estoppels had their natural home. The law makes
  liberal use of the metaphor of binding and being bound. It is in ‘obligation’ and in ‘liable’, more
  obviously in ‘bond’. ‘Estoppel’ is another version of the same metaphor. As a wine bottle is
  corked, so one is restricted or shut up. In short, one is bound. The phrase ‘in pais’ is often
  added. This is evidently thought to give extra dignity. ‘In pais’ means ‘in the country’. In
  English law the jury was ‘the country’, and trial by jury was trial ‘by the country’. It may be
  that the phrase ‘in pais’ originally meant ‘before the jury’ and referred to the evidential effect
  of estoppel. However that may be, we see that estoppel names something obliquely, telling
  us that something binds. The thing or things we need to classify is named by a consequence,
  the consequence being that, at least for some purposes, one is bound. In most estoppels the
  thing in question is an undertaking, and in equitable estoppel, it is an undertaking as to the
  future or, in short, a promise. Demystifying the word does not take us very far, but, subject to
  more refined argument, it does allow the taxonomist committed to a classification of causative
  events to see what event he has to classify.</p>
</blockquote>

<p><a href="https://www.uclan.ac.uk/staff_profiles/richard-taylor.php" rel="nofollow noreferrer">Prof Richard Taylor</a>, <a href="https://www.slaughterandmay.com/who-we-are/partners/damian-taylor/" rel="nofollow noreferrer">Damian Taylor</a>. <a href="https://www.amazon.co.uk/Contract-Law-Directions-Richard-Taylor/dp/0198836597/ref=dp_ob_title_bk" rel="nofollow noreferrer"><em>Contract Law Directions</em> (6 edn, 2019)</a>. p. 211.</p>

<blockquote>
  <p>If you read the case report of <em>Scriven v Hindley</em> then you will notice that Lawrence J did not expressly
  say there was an objective agreement which was overridden because the owner negligently caused
  the bidder’s mistake. That is not to say that the analysis earlier is not accurate; one has to bear in
  mind that the case was decided in 1913. Around that time it was still popular to look for matching
  subjective intentions in order to form an agreement. The objective approach might still prevail if one
  party could rely upon a ‘<strong>contract of estoppel</strong>’ which meant that a party could be estopped (i.e.
  prevented) from saying what he subjectively intended. Lawrence J therefore first said that the parties
  were not ‘ad idem’ (i.e. their subjective intentions differed) and so there could be no contract
  on a subjective basis, before addressing the owner’s argument that the bidder was estopped (prevented)
  from saying that he meant to buy hemp and that therefore there was a contract to buy tow.
  He decided that the bidder could not be estopped when his mistake was caused by the negligence
  of the owner. Thus Lawrence J started by looking for a subjective agreement (which did not exist)
  and refused to allow the objective agreement (what he called the contract of estoppel) to override
  the (lack of) subjective agreement. It is now more common for courts to start with the objective
  agreement and ask whether it should be overridden by the subjective intentions of a mistaken party.</p>
</blockquote>

<p>Ewan McKendrick. <a href="https://www.amazon.co.uk/Contract-Law-Text-Cases-Materials/dp/019880816X/ref=dp_ob_title_bk" rel="nofollow noreferrer"><em>Contract Law: Text, Cases, and Materials</em> (2018 8 ed)</a> pp 37-38. </p>

<blockquote>
  <h2><em>Scriven Brothers &amp; Co v. Hindley &amp; Co</em>. [1913] 3 KB 564, King’s Bench Division</h2>
  
  <p>The plaintiffs instructed an auctioneer to sell by auction a large quantity of Russian hemp and
  tow. The auctioneer prepared a catalogue which did not distinguish between the hemp and
  the tow. Further, both lots were given the same shipping mark, ‘S.L.’. Lots 63– 67 were the
  hemp and consisted of 47 bales and lots 68– 79 were the tow and consisted of 176 bales.
  Prior to the sale, samples of hemp and tow were displayed in the show- rooms in Cutler
  Street. Opposite the samples of hemp was written in chalk ‘S.L. 63 to 67’ and opposite the
  samples of tow was written ‘S.L. 68 to 79’. The defendants’ manager, Mr Gill, inspected the
  hemp but not the tow (he was not interested in bidding for the tow). At the auction the defendants’
  buyer, Mr Macgregor, bid for the 47 bales of hemp and these were knocked down
  to him. Lots 68– 79 were then put up for sale and the defendants’ buyer bid £17 per ton for it
  (an extravagant price for tow). When the defendants discovered their mistake they refused to
  pay for the tow. The plaintiffs brought an action to recover the price of the tow. The defendants
  denied that they had agreed to buy the tow and claimed that the tow had been knocked
  down to them under a mistake of fact.<br>
  &nbsp; &nbsp; &nbsp; The jury made the following findings: ‘(1) That hemp and tow are different commodities
  in commerce. (2) That the auctioneer intended to sell 176 bales of tow. (3) That Macgregor
  intended to bid for 176 bales of hemp. (4) That the auctioneer believed that the bid was made
  under a mistake when he knocked down the lot. (5) That the auctioneer had reasonable
  ground for believing that the mistake was merely one as to value. (6) That the form of the
  catalogue and the conduct of Calman [the foreman in charge of the show], or one of them,
  contributed to cause the mistake that occurred. (7) That Mr Gill’s “negligence” in not taking
  his catalogue to Cutler Street and more closely examining and identifying the bales with lots
  contributed to cause Macgregor’s mistake.’
  &nbsp; &nbsp; &nbsp; On the basis of these findings it was held that the plaintiffs were not entitled to recover the
  price of the tow from the defendants.</p>
  
  <h2>A.T. Lawrence J</h2>
  
  <p>In this case the plaintiffs brought an action for 476l. 12s. 7d., the price of 560 cwt. 2 qrs. 27 lbs.
  of Russian tow, as being due for goods bargained and sold. The defendants by their defence
  denied that they agreed to buy this Russian tow, and alleged that they bid for Russian hemp
  and that the tow was knocked down to them under a mistake of fact as to the subject matter
  of the supposed contract. The circumstances were these.</p>
  
  <p>[he stated the facts and the findings of the jury as set out earlier, and continued]</p>
  
  <p>&nbsp; &nbsp; &nbsp; Upon these findings both plaintiffs and defendants claimed to be entitled to judgment.
  A number of cases were cited upon either side. I do not propose to examine them in detail because
  I think that the findings of the jury determine what my judgment should be in this case.<br>
  &nbsp; &nbsp; &nbsp; The jury have found that hemp and tow are different commodities in commerce. I should
  suppose that no one can doubt the correctness of this finding. The second and third findings
  of the jury shew that the parties were never ad idem as to the subject matter of the
  proposed sale; there was therefore in fact no contract of bargain and sale. The plaintiffs can
  recover from the defendants only if they can shew that the defendants are estopped from
  relying upon what is now admittedly the truth. Mr Hume Williams for the plaintiffs argued
  very ingeniously that the defendants were estopped; for this he relied upon findings 5 and
  7, and upon the fact that the defendants had failed to prove the allegation in paragraph 4
  of the defence to the effect that Northcott knew at the time he knocked down the lot that
  Macgregor was bidding for hemp and not for tow.<br>
  &nbsp; &nbsp; &nbsp; <strong>I must, of course accept for the purposes of this judgment the findings of the jury, but I do
  not think they create any estoppel.</strong> Question No 7 was put to the jury as a supplementary question,
  after they had returned into Court with their answers to the other questions, upon the
  urgent insistence of the learned junior counsel for the plaintiffs. It begs an essential question
  by using the word ‘negligence’ and assuming that the purchaser has a duty towards the seller
  to examine goods that he does not wish to buy, and to correct any latent defect there may be
  in the sellers’ catalogue. Once it was admitted that Russian hemp was never before known to
  be consigned or sold with the same shipping marks as Russian tow from the same cargo, it
  was natural for the person inspecting the ‘S.L.’ goods and being shewn hemp to suppose that
  the ‘S. L.’ bales represented the commodity hemp. Inasmuch as it is admitted that someone
  had perpetrated a swindle upon the bank which made advances in respect of this shipment of
  goods it was peculiarly the duty of the auctioneer to make it clear to the bidder either upon the
  face of his catalogue or in some other way which lots were hemp and which lots were tow.</p>
</blockquote>

<p>I know what estoppel means. I just don't understand why the Taylors below and Mr Hume Williams can use &quot;estoppel&quot; in this case, Scrivens, because Hindley &amp; Co. never promised or undertook anything?</p>
<p>Estoppel was used as a defence in this case. The defendant hoped to use the intention of the buyer and for a part the seller, in determining what was factually agreed. There were two types of estoppel at that time: subjective and objective. The plaintiff argued for objective estoppel(contract estoppel), to rule out the subjective thoughts of the defendant, “he ment to buy hemp”. The judge ruled that there was no estoppel after first discounting the objective and using the subjective test. He then ruled that this was a case of fraud. The Tow was labeled as Hemp would usually be.</p>
<blockquote>
<p>I must, of course accept for the purposes of this judgment the
findings of the jury, but I do not think they create any estoppel.</p>
</blockquote>
<p>Discussion below:
Try not confused estopped(stop old language) with estoppel(legal language).</p>
<blockquote>
<p>the bidder could not be estopped</p>
</blockquote>
<p>Personally I thought what the professor writes makes no sense at first, considering estoppel, or a judgement in contract estoppel.</p>
<blockquote>
<p>A landlord may tell his tenant that he is not required to pay rent for
a period of time (&quot;you don't need to pay rent until the war is over&quot;).
Until the war is over, the landlord would be &quot;estopped&quot; from claiming
rents during the war period.</p>
</blockquote>
<p>But if you think that at that time there were two versions of estoppel. Based on subjective(estoppel): what the person thought intentions were, and objective (contract estoppel) what was constructed or happened at the time. !!In this para the brackets do not refer to the legal actions we call today but what the Judge called them.!!</p>
<p>So with this in mind - The professor explains, and the read together with the Judge respectfully ignoring Hume Williams pleas as “ingenious”. Which I think might have been “lawyer speak” for a young upstart.</p>
<p>William for the plaintiff tries to argue that the &quot;defence's estoppel&quot; should be objective(contract estoppel) not subjective(estoppel). And therefore should only use what happened at the auction.</p>
<blockquote>
<p>i.e “(5) That the auctioneer had reasonable ground for believing that
the mistake was merely one as to value. And  (7) That Mr Gill’s
“negligence”(buyers' manager) in not taking his catalogue to Cutler Street and more
closely examining and identifying the bales with lots contributed to
cause Macgregor’s(bidder) mistake.’”.</p>
</blockquote>
<p>He does this to estopp(stop) the defendant and judge relying on the &quot;intentions&quot; subjective method of estoppel (agreement on fact to stop legal action):</p>
<blockquote>
<p>The plaintiff intending to sell hemp and tow; and the defendant intending
to buy hemp.</p>
</blockquote>
<p>But the judge makes his own mind and applies &quot; contract estoppel&quot; properly as subjective. Because he doesn’t like the “ingenious”. And finds that estoppe</p>
<p>Asides below:
Williams tries to rely on the negligence of the bidder to say this is their mistake. But shoots himself in the foot as the judge wants to see why he might have been negligent.</p>
<p>I'm not sure what knock down means - is this discounted or sold by hammer?</p>
<p>Estoppel is to prevent a legal action based on what was a fact. Contact estoppel seeks to incorporate those facts into the contract.</p>
<p>It may be from this that “Contract Estoppel” is seen as a defence in the UK and an action in the US.</p>

<blockquote>
<p>What's a “‘contract of estoppel’”?</p>
</blockquote>
<p>A <em>contract of estoppel</em> (or <em>by</em> estoppel) is an <em>implied-in-fact</em> or <a href="https://en.wikipedia.org/wiki/Implied-in-fact_contract" rel="nofollow noreferrer"><em>implicit</em> contract</a> in which the acts of the parties forfeit the liable party's denial of that contract. Said acts embody the <em>objective agreement</em>, whereas the subsequent allegations as to their intention thereof are of a <em>subjective</em> nature.</p>
<p>A party might originally have declined to form a contract if it were proposed to him, yet his <em>de facto</em> acquiescence to the counterparty's act(s) might entitle the acquiescent party to the considerations &amp; benefits just as if the parties had fully intended to enter an explicit contract to that effect.</p>
<p>Such acquiescence could lead to a finding that a contract [of estoppel] existed, provided that the laws of that jurisdiction do not prescribe requirements that are missing in the matter at issue. For some types of contracts, legislation requires formalities and/or affirmative actions which might are not necessarily met in a context of acquiescence. Absent that sort of requirements, the non-performing party would be estopped from disputing the existence of a contract with the acquiescent party.</p>
<blockquote>
<p>why the Taylors below and Mr Hume Williams can use &quot;estoppel&quot; in this case</p>
</blockquote>
<p>Actually Willams' argument of estoppel was rejected, meaning that the plaintiffs' theory of <em>contract of estoppel</em> failed (I see no detail on Taylor's argument so as to compare it with Williams').</p>
<p>Williams tried to shift to the defendants the blame for not verifying lots 68-79. But the court concluded that using the same shipping marks (&quot;S.L.&quot;) for both sets of lots rendered it &quot;<em>peculiarly the duty of the auctioneer to make it clear to the bidder [...] which lots were hemp and which lots were tow</em>&quot;. In other words, a reasonable person would presume that lots with similar label contain the same product such person found in the sample he inspected, whence warning against that reasonable presumption was the counterparty's responsibility. Williams' allegation that the defendant should have conducted additional inspections was unpersuasive.</p>
