This document discusses the legal doctrines of contracts, estoppel, election, and waiver. It explains that estoppel prevents a party from abandoning an assumption that led another party to detrimentally change position. Election requires choosing between inconsistent legal rights. Waiver involves deliberately abandoning a legal right. Promissory estoppel can create or prevent enforcement of legal obligations where one party relied on a promise from another to their detriment, even without consideration. The document provides examples and case law analyses of how these doctrines relate and have been applied in different legal contexts.

1. By Paul Taylor

2. A contract:
 Provides for the enforcement of promises
supported by consideration.
 No consideration then prima facie a person
is free to retract from that position.

3.  What about a change of position, such as
variation to a contract or conduct by A
leading to change in position by B where
there is no consideration?
 No contract – no remedies.
 Doctrine of estoppel/election or waiver may
prevent such an unjust departure.

4. Estoppel: protection against the detriment which
would flow from a party’s change of
position if the assumption that led to it
was deserted.
Election: involves a party making a selection
between inconsistent legal
rights. Choosing one right necessarily
involves abandoning the other.
Waiver: 'synonymous' to or 'overlapping' with
election and estoppel. A party has
waived one of its legal rights in favour of
another.

5. The thread that links together the concepts of
waiver, election and estoppel is the deliberate
abandonment of legal rights.
“Any discussion of the principles governing the
circumstances in which a party’s words or
conduct may preclude him from exercising a
legal right…have their origin in the differences to
be found in the various doctrines (election,waiver
and estoppel)” – Sargent v ASL Developments Ltd
(1974) 131 CLR 634, Mason J at 273

6. An estoppel may arise:
(a) Where a promise or representation is made
in the context of pre-exising contractual
relationship.
(b) Where a promise or representation is made
in a situation where there is no pre-
existing legal relationship.
(c) In respect of a promise which is not
supported by consideration.

7.  ‘Representations (or promises) as to future
conduct.’(Legione v Hateley (1983) (HC))
 In Waltons Stores (Interstate) Ltd v Maher
(1988) 164 CLR 387 at 428-9, Brennan J set
out the essential elements of promissory
estoppel.
 Three elements at least are essential:
1) Promise (representation or assurance);
2) Reliance on the promise;
3) Inequity or unconscionable conduct.

8. Usually in context of a contract between
parties.
Extended by Commonwealth v Verwayen
(1990) 170 CLR 394 – pre-existing relation of
plaintiff and defendant in the context of
litigation.
Example: where A promises B that he would
not enforce his legal rights under the terms of a
contract and B acted and relied on it without
giving any consideration, equity would not
allow A to renege on his promise to B.

9. Up until Waltons –v- Maher, promissory estoppel
could only be used in pre-existing legal
relationships.
 The doctrine can now operate in the absence of
existing contractual relations.
 It can be used as a sword (offensively, as an
cause of action) as well as a shield (defensively,
only if someone else sues you first).
 Example: during the course of negotiations for
a contract A makes a promise or representation
to B that the negotiations will be completed in
accordance with the terms agreed, A may be
estopped by B from denying it has agreed to
complete the negotiations.

10. Any promise or representation must be:
 Unequivical and unambiguous;
 May be express or implied.
 Legione v Hateley (1983) Mason and Deane JJ

11.  Reliance: must be definite or substantial.
 Detriment: the promisee must have ‘placed
himself in a position of material disadvantage if
departure from the assumption be permitted.’
 Unconscionability: dishonest behaviour by
promisor. Satisfied if promisor encourages the
promisee to create assumptions that lead to
reliance.
All must be demonstrated to succeed either as a
cause of action or a defence on the basis of
promissory estoppel.

12.  Election consists in a choice between rights
which the person making the election knows
he possesses and which are alternative and
inconsistent rights.
 Example: Party A to a contract is entitled to
terminate by reason of breach by B. Instead
of terminating A (promisee) may elect to
affirm the contract.
 The election by A in not terminating is to say
the alternative right to terminate has been
‘waived.’

13.  Sometimes the abandonment of a right may
be described as waiver.
 Waiver in the sense of election does not
require consideration.

14.  There is no conclusive statement that waiver is a
standalone principle and is unlikely to be
favoured.
 Kirby J, in a minority judgement in Agricultural
and Rural Finance Pty Ltd v Gardiner (2008) (HC)
held that "waiver" constituted a stand-alone
principle beyond instances of contractual
variation, estoppel and election.
 In the sense of election the concept of waiver has
been used as merely an example of the operation
of the wider doctrine of election, i.e. a party has
waived one of its legal rights in favour of
another.

15. Waiver in the sense of estoppel occurs when :
 Party A has ‘waived’ its rights, by words or
conduct, conferred by the contract or by law.
 The discharge or abondonment of a contract
by reason of estoppel
Requirements of estoppel will need to be
established.
Waiver appears more apt as a description of an
end result of promissory estoppel.

16.  Promissory estoppel may not apply in the setting of
corporations with equal bargaining power –Austotel Pty
Ltd v Franklins Selfserve Pty Ltd (1989) (NSW) – court held
plaintiff acted in reliance of its own commercial interest.
 Promissory estoppel may be:
a) by way of defence in relation to a contractual right; or
b) in the assertion of a positive right against the party
estopped.
 The remedy, whether damages or some other equitable
relief, granted on the basis of an estoppel must be
proportionate to the detriment suffered.