2: Government Estoppel A Brief History: Royal Perogative DoctrineThe Doctrine of Estoppel developed in common law in the context of Royal Doctrine. The royal prerogative is the collection of “those rights and powers which the sovereign enjoys, unlike the others, and not those which he has in common with one of his subjects.” The royal prerogative thus granted the sovereign many preferences in judicial proceedings where the king`s rights conflicted with those of a subordinate. Among these preferences was the doctrine that “the king is not related to Estoppel.” On the other hand, the king could exploit an estoppel, although the Estoppel must be reciprocal between the subjects. Conclusion Agency by Estoppel has been a dominant concept for many centuries. However, the modern concept of Estoppel is based on principles of fairness according to which a person is liable for the harm suffered by another person on the basis of an assurance he has given. However, the person is only liable for the damage caused and not for the loss of the expected benefits. It works on the principle of avoiding the lowest costs. Since the procuring entity can easily correct the third party in error, it is its duty to explain the area of jurisdiction (real or obvious) of its means of performance. It was found that the scope of Indian law with respect to the common law is narrower in cases relating to the representation of Estoppel. Since the principle of representation by legal effect is a principle of fairness, there is also an obligation for the third party to make a reasonable attempt to determine the actual authority of the agent before entering into a contract.
A legally binding agency relationship that can be created if no formal agency contract is actually in effect. A client can give the appearance of an agency relationship by providing the agent, for example, with business cards or other stationery of his company. In such cases, the existence of an agency may be presumed and the contracting authority may be bound by the acts of the agent performed on behalf of the contracting entity. Sometimes also referred to as a presumption of freedom of choice. The Indian Contract Act of 1872 enshrined Estoppel`s principle of capacity to act in section 237, which provides that if an agent has committed acts or obligations towards third parties on behalf of his contracting authority, the contracting authority is bound by such acts or obligations when, by his words or conduct, has led those third parties to accept: that such acts and obligations fall within the competence of the agent [ 20]. . . . .