Content area
Full Text
INTRODUCTION
Although some of our High Court judges have argued for a single unified doctrine of estoppel,(1) the various categories of estoppel still remain. Since the 1980s one of these categories, estoppel by convention, has undergone a remarkable renaissance in both Australia and England.(2) Australian judges have been considering an expansion in the scope of this common law doctrine through the operation of equity to enable courts to look beyond the traditional grounds of the doctrine in order to examine pre-contractual negotiations. In this article I will examine equity's influence upon estoppel by convention and consider how this has expanded the grounds upon which it can be founded to include pre-contractual negotiations.
THE DOCTRINE OF ESTOPPEL BY CONVENTION
The High Court has defined estoppel by convention as
"a form of estoppel founded not on a representation of fact made by a representor and acted on by a representee to his detriment, but on the conduct of relations between the parties on the basis of an agreed or assumed state of facts, which both will be estopped from denying".(3)
The essential difference between this doctrine and other doctrines of estoppel is the requirement that the parties adopt "a common assumption as the basis of their working relations".(4) Consequently, any party to a transaction will be estopped from denying the common assumption or convention that forms the basis of the transaction.
Traditionally the courts have held that an estoppel by convention is based either upon the construction of a contract or upon the parties' conduct subsequent to the formation of a contract.
In Dabbs v Seaman(5) Isaacs J stated that evidence of a convention "must be determined upon its [a contract's] construction".(6) In Estoppel by Representation(7) Spencer Bower and Turner state that the rationale for this approach is that "the true construction of the instrument leads to the conclusion that the parties have agreed ... to assume the facts as the conventional basis upon which they founded their contractual obligations".(8)
In Grundt v Great Boulder Pty Gold Mines Ltd(9) Dixon J was prepared to consider the conduct of the parties subsequent and in relation to the concluded contractual relations between them in order to determine the existence of a convention. Spencer Bower and Turner state that...