Estoppel is a legal rule that prevents somebody from stating a position contradictory with one previously stated, especially when the earlier representation has been relied upon by others. An estoppel also blocks a party from re-opening an issue that has previously been decided by a court.

When buying a home in a homeowners association or condominium association, your title company or real estate attorney should demand an estoppel from the governing body. This ensure all previous payments have been made and no past issues are still present that might carry over to the new home owners.

Examples: The case of a nonpayer and a creditor. The creditor might unofficially inform the nonpayer that the debt has been forgiven. Even if the original contract was not terminated, the creditor may be stopped from collecting the debt if he changes his mind later. It would be unfair to allow the creditor to change his mind in light of the unofficial agreement he made with the nonpayer previously. A landlord might inform a tenant that rent has been reduced, for example, if there was construction or a drop in utility services. If the tenant relies on this advice, the landlord could be stopped from collecting the full rent retroactively.