Equitable Estoppel as a Defense in New York

Equitable estoppel is a defense used in New York courts to stop a party from asserting a legal right or position that contradicts their previous conduct, especially when someone else relied on that conduct and would be harmed if the new position were allowed. Rather than being a separate claim, equitable estoppel is often raised as a shield against unfairness when one party has acted in a way that misled another.

This defense is rooted in the idea that the law should not reward dishonesty or inconsistency, particularly when someone else has been harmed by relying on what they were told or led to believe. For equitable estoppel to apply, both the conduct of the party being estopped and the reliance of the other party must meet specific requirements.

False Representation or Concealment of Material Facts

The party being estopped must have made a false statement or failed to disclose important facts. It does not need to be an outright lie—remaining silent when there is a duty to speak can also count. For example, if a landlord repeatedly assures a tenant that they do not need to worry about renewing a lease, and then later refuses to renew it, this could be viewed as a misleading omission.

Intention That the Conduct Will Be Relied Upon

The misleading party must have intended that their conduct—whether a statement or silence—would be acted upon. It is not enough that the conduct happened; it must be clear that it was likely to influence the other party’s actions.

Knowledge of the Real Facts

To use equitable estoppel as a defense, the person accused of misleading conduct must have known the truth when they made the false statement or concealed the facts. Honest mistakes do not qualify.

Lack of Knowledge of the Truth

The person who relied on the misleading conduct must not have known the truth. If they were aware, or should have known the real facts, the defense of estoppel may not succeed.

Reasonable Reliance on the Other Party’s Conduct

The party raising estoppel must have reasonably relied on what they were told or what was implied. Their decision to act must be understandable under the circumstances, such as making financial commitments or passing up other opportunities based on the misinformation.

A Prejudicial Change in Position

Finally, the relying party must show that they changed their position in a harmful way because of the misleading conduct. This harm could include financial losses, lost opportunities, or other significant consequences.

Conclusion

Equitable estoppel as a defense in New York is a powerful tool for stopping unfair reversals in position. It is especially relevant in disputes involving contracts, leases, or prior negotiations. If someone has been led to believe one thing and acted on that belief to their detriment, they can use equitable estoppel to prevent the other side from changing course. Courts apply this defense to ensure that people are held accountable for their words and actions when others have relied on them in good faith.

Find the Law

“The elements of equitable estoppel are: with respect to the party estopped: (1) conduct which amounts to a false representation or concealment of material facts; (2) intention that such conduct will be acted upon by the other party; and (3) knowledge of the real facts. The party asserting estoppel must show with respect to himself: (1) lack of knowledge of the true facts; (2) reliance upon the conduct of the party estopped; and (3) a prejudicial change in his position (Airco Alloys Division, Airco Inc. v. Niagara Mohawk,76 AD2d 68) ( citations omitted).” Adams v. Washington Group, LLC, 2006 N.Y. Slip Op. 50672 (N.Y. Sup. Ct. 2006)