Estoppel is described as an equitable principle for what scenario?

• A. An equitable principle that if one intentionally or unintentionally creates the impression that a fact exists, and an innocent party relies on that impression and is damaged as a result, the wrongdoer may be estopped from asserting that the fact does not exist.
• B. An allowance for employers to avoid liability by claiming force majeure.
• C. An approach to determine whether a policyholder acted in good faith.
• D. An exemption that allows a party to avoid a contract after signing.

Answer: (A)

Estoppel prevents a party from denying or contradicting a fact when their own conduct has caused another party to rely on that fact to their detriment. The scenario fits because one party creates the impression that a fact exists, the innocent party relies on that impression, and suffers damage as a result. Because it would be unfair for the misrepresenting party to profit from that reliance, they are barred from later denying the fact. This is the essence of estoppel in equitable terms.

The other choices describe different doctrines: force majeure deals with excusing performance due to external events; good faith concerns honest dealing but not reliance on a prior impression about a fact; and an exemption to avoid a contract after signing relates to waiver or rescission, not estoppel.