examples of equitable assignment

Equitable Assignment: Everything You Need to Know

An equitable assignment is one that does not fulfill the statutory criteria for a legal assignment, but is binding and upheld by the courts in the interest of equability, justice, and fairness. 3 min read updated on February 01, 2023

An equitable assignment is one that does not fulfill the statutory criteria for a legal assignment, but is binding and upheld by the courts in the interest of equability, justice, and fairness.

Equitable Assignment

An equitable assignment may not appear to be self-evident by the law's standard, but it presents the assignee with a title that is protected and recognized in equity. It's based on the essence of a declaration of trust; specifically, essential fairness and natural justice. As long as there is valuable consideration involved, it does not matter if a formal agreement is signed. There needs to be some sort of intent displayed from one party to assign and the other party to receive.

The evaluation of a righteous equitable assignment is completed by determining if a debtor would rationally pay the debt to another party alleging to be the assignee. Equitable assignments can be created by:

• The assignor informing the assignee that they transferred a right to them
• The assignor instructing the other party to release their obligation from the assignee and place it instead on the assignor

The only part of an agreement that can be assigned is the benefit. Generally speaking, there is no prerequisite for the written notice to be received or given. The significant characteristic that separates an equitable assignment from a legal assignment is that most of the time, an equitable assignee may not take action against a third party. Instead, it must rely on the guidelines governing equitable assignments. In other words, the equitable assignee must team up with the assignor to take action.

The Doctrine of Equitable Assignment in Wisconsin

In Dow Family LLC v. PHH Mortgage Corp ., the Wisconsin Supreme Court issued in favor of the doctrine of equitable assignment. The case was similar to many other foreclosure cases, except this one came with a twist. Essentially, Dow Family LLC purchased a property and the property owner insisted the mortgage on the property had been paid off. However, in actuality, it wasn't. 

Prior to the sale, the mortgage on the property was with PHH Mortgage Corp. When PHH went to foreclose on the mortgage, Dow Family LLC contested it. There was one specific rebuttal that caught the attention of the Wisconsin Supreme Court. The official mortgage on record was with MERS, an appointee for the original lender, U.S. Bank.

Dow argued that PHH couldn't foreclose on the property because the true owner was MERS. Essentially, Dow was stating that the mortgage was never assigned to PHH. Based on this argument, PHH utilized the doctrine of equitable assignment.

Based on a case from 1859, Croft v. Bunster, the court determined that the security for a note is equitably assigned when the note is assigned without a need for an independent, written assignment. Additionally, Dow contended that the statute of frauds prohibits the utilization of the doctrine, mainly because it claimed every assignment on a property must be formally recorded.

During the case, Dow argued that the MERS system, which stored the data regarding the mortgage, was fundamentally flawed. According to the court, the statute of frauds was satisfied because the equitable assignment was in accordance with the operation of law. Most importantly, the court avoided all consideration regarding the MERS system, concluding it was not significant in their decision. 

The outcome was a major win for lenders, as they were relying on the doctrine specifically for these types of circumstances.

Most experts agree that this outcome makes sense in the current mortgage-lending environment. This is due to the fact that it is still quite common for mortgages to be bundled up into mortgage-backed securities and sold on the secondary market.

Many economists claim that by not requiring mortgages to be recorded each time a transfer is completed, the loans are more easily marketed to investors. Additionally, debtors know who their current mortgage company is because the new lender must always notify the current borrower in order to receive payment. It was determined that recording and documenting the mortgage merely provides a signal to the rest of the world that the property owner secures a debt.

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What Is an Equitable Assignment?

An equitable assignment is a transfer of future interest that doesn’t fully meet legal standards, but will still be honored by courts. This is an example of a situation covered by equity, or fairness, rather than specific legal doctrine. Courts will enforce such agreements when they are not covered by existing laws, as long as they appear reasonable, fair, and without coercion. The standards for an equitable assignment to pass court scrutiny can depend on the region and the situation.

In such assignments, people can reassign future income in several different ways. One option can be to transfer interest, like part of a trust, to another person; the trust is guaranteed income, but the assignor waives the right to it, allowing the assignee to benefit from it. Another way to perform an equitable assignment is to have third parties transfer anticipated payments to the assignee. In all cases, the transfer involves future income or benefits, not current ones.

Expectations do not count as an equitable assignment. If a child believes she will inherit her father’s house, for example, she cannot transfer her interest in the house to another party. This is because the inheritance is an expectation, not a guarantee. In the event she does not inherit the house, the person she transferred the interest to has no recourse. Thus, someone cannot ask to have a debt written off in exchange for a future expectation.

Due consideration also needs to be part of an equitable assignment transaction to prevent fraud and ensure a transaction is legitimate. In the example of assigning rights to a trust, for instance, the assignor would need to receive something in exchange. That might be a bulk payment to buy the right to proceeds from the trust later. If due consideration is not present, the court may not uphold the agreement, on the grounds that it could be suspect. A special concern can be attempts to transfer rights to future earnings for the purpose of avoiding tax liability, in which case the assignee might be planning to transfer the funds back or allow the assignor to use them.

Specific legal standards for equitable assignments can depend on the nation. People with concerns can consult an attorney for advice in these situations. Attorneys with expertise in this area are familiar with actions in equity courts and can determine whether a transaction is likely to hold up in court.

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a MyLawQuestions researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

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Equitable assignment

Practical law uk glossary 2-107-6540  (approx. 3 pages).

• The assignor can inform the assignee that he transfers a right or rights to him.
• The assignor can instruct the other party or parties to the agreement to discharge their obligation to the assignee instead of the assignor.
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Equitable Assignment Design

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Why is equity important in assignment design?

Many instructors have taken a renewed interest in the equity and fairness of their courses. Although all aspects of teaching and learning merit such a focus, it is particularly important in the area of assignment design. Assignments designed with equity in mind ensure that all students have optimal conditions in which to demonstrate their learning; this in turn helps faculty evaluate students’ knowledge and skills fairly and accurately. 

What makes an assignment equitable?

Among the features of assignment that can make assignments more equitable are flexibility and variety, an emphasis on the process of learning, application of principles of Universal Design for Learning (UDL) , transparency, and equitable grading. Below we define each of these terms and provide some specific examples.

Flexibility and Variety

Constructing assignments with flexibility and variety in mind can allow students to show what they have learned regardless of their academic strengths or familiarity with particular assignment types. These features require that faculty think through how each assignment (in all its variations) aligns with the learning outcomes for the course, to ensure that all students have an opportunity to achieve those outcomes.

• Within an assignment, allow students to choose from several different formats for their response that all meet the assignment goals
• Across a course, provide a variety of types of assignments
• If a major project includes several different components (a written paper and an oral presentation, for example), allow students to determine the weight of each component
• If you must use multiple-choice exams to assess students’ learning, consider offering an alternative assignment for students who don’t test well, or who have slow internet connections

An Emphasis on the Process of Learning

With careful assignment construction, instructors can hep students engage in and prioritize the process of learning. This will not only improve students’ performance; it can also increase their time on task, which can benefit all students.

• Adopt a growth mindset in your teaching by emphasizing that students can succeed in your course with hard work and effort
• Give students frequent opportunities to demonstrate their learning, including low-stakes chances to practice skills and assess their own progress toward course goals
• Scaffold students’ work to facilitate building skills, and offer frequent feedback on students’ progress
• Allow students to revise their work to respond to your feedback
• Help students reflect on the processes they used to respond to major assignments or to study for exams

Application of Principles of Universal Design for Learning (UDL)

UDL is a set of principles to guide the creation of inclusive and accessible courses and learning experiences. When these principles are applied to assignment design, they can benefit all students, not only those with disabilities.

• Provide assignment instructions in writing and verbally
• Simplify the navigation in your course Canvas site so students can find assignments easily
• Give students some choice in how they can show their learning
• Consider alternatives to traditional multiple-choice exams
• Provide ample time for exams and online assignments to be completed

Transparency

This is the concept of making clear to students the purpose of assignments and activities and how to succeed on them. Being transparent with students ensures that all students can succeed, not only those with privileged educational backgrounds.

• For assignments that include a rubric, share it with students when they start to work on the assignment; you can even involve students in rubric creation
• Be transparent in your assignment design by specifying in each assignment its purpose, the process or task students should engage it, and the criteria that will be used to evaluate it
• The concept of transparency in teaching includes other pedagogical strategies in addition to transparent assignment design. For more information, see the page on Transparency in Learning and Teaching (TILT) .

Equitable Grading

Along with equitable assignment design, faculty can grade students equitably on the basis of their learning and performance, and without allowing factors such as race, ethnicity, socio-economic status, abilities, rural/urban location, or internet access to influence grades. In this way grades can be used not to sort and rank students, but instead to guide all students to achieve course learning outcomes.

• If you will use a rubric or grading standards to evaluate students’ work, share it when making an assignment so that all students understand how their work will be evaluated
• Provide feedback along with grades to help students understand the strengths and weaknesses of their work and how to improve it
• Avoid “magical grading”: grading on the basis of factors or traits that are not articulated, or that are assumed to be “implicit”
• Consider whether it is more equitable to weight assignments done early in the semester more lightly and those done later more heavily, after students have had a chance to learn about your standards and expectations 

For more help with applying any of these concepts to your teaching, contact the CITL .

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What is the significance of an equitable assignment in the context of the assignment of future rights under a contract (or a chose in action)?

An assignment is the transfer of a right or an interest vested in one party (assignor) to another party (assignee). The effect of a valid assignment is to entitle the assignee to demand performance of a contractual obligation.

Assignments may be legal or equitable.

A legal assignment is one which meets the requirements set out in section 136(1) of the Law of Property Act 1925 (LPA 1925). It must be:

absolute and unconditional and not purport to be by way of charge only

made in writing and signed by the assignor

expressly notified in writing to the obligor

Equitable assignments may arise in the following circumstances:

where there is an intention to assign, but not all of the formalities of a legal assignment are met under LPA 1925, s 136(1), the assignment may still be valid as an equitable assignment . The formalities for an equitable assignment to be effective are far less stringent

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Related legal acts:

• Law of Property Act 1925 (1925 c 20)

Key definition:

Equitable assignment definition, what does equitable assignment mean.

Assignments can occur in equity when any of the requirements of legal assignment are not satisfied.

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Article Contents

‘equitable’ ‘estoppel’: ‘a meaningless expression’, promissory estoppel: three principles, proprietary estoppel, general conclusions.

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Understanding Equitable Estoppel: From Metaphors to Better Laws

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Ben McFarlane, Understanding Equitable Estoppel: From Metaphors to Better Laws, Current Legal Problems , Volume 66, Issue 1, 2013, Pages 267–305, https://doi.org/10.1093/clp/cut012

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This article has both a specific and a broader aim. First, it examines the law of promissory estoppel and of proprietary estoppel and considers if the doctrines can best be understood as part of a unified equitable estoppel. It will be argued that each of the two doctrines is itself composed of irreducibly dissimilar principles. The key to understanding the doctrines, therefore, is to identify and isolate these specific principles, not to merge them into an undifferentiated notion of equitable estoppel. Secondly, the article asks what an examination of equitable estoppel can tell us about the wider question of the nature of equitable principles and their place within a modern legal system. It will be argued that it is a mistake to view doctrines such as equitable estoppel as merely variants of their common law analogues. Rather, the adjective equitable stands as a warning that the noun to which it relates is used only in a metaphorical sense, and it is therefore dangerous to assume that the equitable principle must have even the same basic features as its common law namesake.

An inaugural lecture provides an opportunity to consider the persistent question of the uses, if any, of legal scholarship. Research in private law addresses the fundamental question of what legal rights we, as individuals, have one against another. The conclusions reached are important not only to academics, lawyers, and judges, but also to anyone subject to the law. In common law systems, the task of addressing that question is complicated by the need to grapple with the courts’ attempts, over hundreds of years, to develop and delineate our rights. This richness of precedent also makes the task more rewarding. The vast and intricate body of judicial decisions known as the common law is one of England’s most characteristic and enduring intellectual contributions; to engage with and to seek to improve that law is to undertake a task that is both conceptually demanding and practically important.

The ‘real-life’ significance of equitable estoppel can be attested to by any attentive visitor to the Supreme Court. In the permanent exhibition covering the history and significance of the UK’s top court, one of the displays is entitled: ‘The relevance of the Supreme Court to everyday life.’ It asserts, with questionable syntax but some justification, that ‘our highest judges make decisions that affect not only those involved in a particular case, but also set the guiding principles of how we live our everyday lives’. To support this claim, three cases are described.

The most recent of these is Thorner v Major , 1 one of the House of Lords’ final judicial decisions. Peter Thorner, a taciturn farmer from Somerset, had indicated to David, his cousin, that David would inherit Peter’s farm. As a result, David had continued to work on that farm, for very low pay, for a further 15 years. When Peter died without having made a valid will, the statutory intestacy rules imposed a duty on Peter’s administrators to hold the farm for the benefit not of David but of other relatives of Peter, closer to him in blood if not in life. The House of Lords confirmed, however, that equitable estoppel operated to impose a duty on Peter (and now on his administrators) to transfer to David the farm and associated assets. The decision meant not only that David was around £2.1 million better off than he would have been had no estoppel claim been possible but also that, in the words of the Supreme Court’s exhibition’s display: ‘if a verbal promise is made to someone who subsequently relies on that promise to their own detriment, that promise can be enforced under the principles of fairness and equity’.

This article considers how the law of equitable estoppel, including decisions such as Thorner v Major , can best be understood; one of its aims is to provide a more precise account of the principle applied in Thorner . Its focus will be on the two principal forms of equitable estoppel: promissory estoppel and proprietary estoppel. 2 There are, currently, legal problems as to the relationship of those two doctrines and as to the scope and operation of each. An important general question is whether those problems could best be resolved by merging the two doctrines into a single, unified principle. Both academic and judicial support can be found for such a rejection of the conventional separation. 3 The debate, like many other things, is the other way around in Australia: it might have been thought that, following the landmark decision in Waltons Stores (Interstate) Ltd v Maher , 4 the unified model of (at least) equitable estoppel was on top down under. There has, however, been strong resistance to such a model; the silver jubilee of Waltons Stores has been somewhat tarnished by judges, in Western Australia, 5 Victoria and New South Wales, 6 drawing a sharp distinction between promissory estoppel on the one hand and proprietary estoppel on the other.

It will be argued here that that each of the two doctrines of promissory estoppel and proprietary estoppel is itself composed of irreducibly dissimilar principles. The key to understanding equitable estoppel, and to addressing particular questions about its nature and operation, is to identify and isolate these specific principles. 7 Indeed, many of the current difficulties can be traced back to a failure properly to distinguish between these different, discrete principles. On this view, of course, English law should reject attempts to formulate a single, unified test for equitable estoppel. A merged doctrine would not be an elegant synthesis but would be an amalgam of dubious provenance and doubtful utility: 8 the product of giving Occam’s Razor to Procrustes.

This is not to say, however, that English law should adopt the rigid distinction between promissory estoppel and proprietary estoppel urged by those recent Australian decisions. 9 For one of the distinct principles—the one, in fact, applied in Thorner v Major —has been applied in cases decided under the banners of each of promissory estoppel and proprietary estoppel. For ease of reference, it will be referred to here as the promise-detriment principle. It recognizes that if: (i) A makes a promise to B; and (ii) A knows or ought reasonably to have known that B might act in reliance on that promise; and (iii) B, because of his reasonable reliance on that promise, would suffer a detriment if A were wholly free to renege on that promise; then (iv) A comes under a liability to B to ensure that B does not suffer such a detriment. There is a strong argument that, in English law at least, the identification of the principle with promissory estoppel and proprietary estoppel has led to its being artificially restricted; its true nature has been disguised by the company it keeps. The principle should, therefore, outgrow those forms of equitable estoppel and operate more broadly. 10 The merits of this argument will not be examined in detail here; but it will be argued that such an evaluation can occur only if the principle is disentangled from the thorn-bush of estoppel.

It is accepted, however, that the promise-detriment principle can be seen as operating both in some cases described as depending on promissory estoppel and in some cases apparently applying proprietary estoppel. To understand the principle, therefore, it is necessary, in this very specific way, to transcend the supposed boundary between those two forms of equitable estoppel. Such an exercise can be undertaken, however, without adding one’s voice to Lord Denning’s call for equitable estoppel to depend on ‘one general principle shorn of limitations’. 11 The promise-detriment principle must be carefully limited; but those limits should flow from the nature of the principle itself, rather than from an unprincipled use of labels, or from confusion with the other principles comprising promissory estoppel and proprietary estoppel.

As well as dealing with the specific nature of promissory and proprietary estoppel, this article also will also consider what equitable estoppel can tell us about the nature of equitable principles and their place within a modern legal system. Equitable estoppel is, of course, only a small and relatively obscure part of the corpus of judge-made law. Nonetheless, it forms a useful sample: lessons drawn from its examination may be applied more broadly. Two general points will be made: the first, concerned with the naming and labelling of legal doctrines, can be related to the noun ‘estoppel’; the second, about the nature of the rules developed by the courts of Chancery, depends on the adjective ‘equitable’. These wider points will be examined first, as this article’s consideration of equitable estoppel will start with the general before moving to the particular.

The essence of an estoppel is quite simple: a party is stopped from denying the truth of a particular state of affairs. Objectively speaking that state of affairs may, or may not, exist, or have existed; as far as the parties to the estoppel are concerned, all that matters is that A cannot contend otherwise. Estoppel thus describes a particular outcome: the preclusion of A. The term, by itself, indicates nothing as to the reason for which that outcome has arisen. In examining such reasons, Coke identified three different forms of estoppel: by matter of record; by matter in writing; and by matter in pais. 12 The first is now generally referred to as estoppel per rem judicatam : if a matter has been conclusively determined by a valid judicial decision between the parties or their privies then A can be prevented from re-litigating that matter. 13 In such a case, it is the existence of the previous decision, and the need to respect its finality, that explains the outcome. As shown by Coke’s examples of the second category, A’s preclusion there depends on the idea that, if A has made statements in a deed, and A then uses that deed to assert a right, A cannot deny the truth of those statements. 14 The third category, the contents of which have grown significantly since Coke’s time, includes estoppels that can arise in the absence of a judicial decision or a deed. 15 One example occurs if A makes an oral statement to B, intending B to act on that statement: if B does so act, and alters his position as a result, A may be prevented from denying the truth of that statement. 16 The principle applying in such a case can be referred to as estoppel by representation. It is clear even from this very brief summary that there is a metaphorical aspect to estoppel: 17 whilst A is literally prevented from bringing forward particular evidence, the effect of the estoppel is that parties are treated as if something is or was the case, whether or not that thing is in fact true. It is also understandable that estoppel is seen as primarily evidential: 18 it is relevant when establishing the factual basis against which the parties’ rights will be determined.

In Thorner v Major , however, equitable estoppel was not used to preclude Peter (or his administrators) from denying a particular fact. In that case, David’s claim depended on the facts that had actually occurred. Once those facts were proved, principles of proprietary estoppel were used to determine their legal effect. If one were to apply genuine estoppel principles to the case, the most that could be said is that Peter was prevented from denying that a promise had been made to David. Such an estoppel, however, would be both redundant and pointless: redundant, because David was in any case able to prove that such a promise had been made; pointless, because Peter’s making of a promise would not, by itself, give David a right. The effect of David’s claim was not that Peter or his administrators were precluded from asserting the existence of any particular state of affairs. The outcome thus did not involve any genuine estoppel. David’s right arose not because of any preclusionary principle but rather because of the application of a particular strand of proprietary estoppel: the promise-detriment principle.

This leaves us in an awkward position: in some cases at least, equitable estoppel has little or nothing to do with estoppel. The same point can be made by examining promissory estoppel. Indeed, the name of that doctrine verges on the oxymoronic. If a legal principle is to operate as a true estoppel, it cannot be based on a promise as to A’s future conduct. An estoppel by representation, for example, as described by Lord Denman CJ in Pickard v Sears , 19 applies where A causes B ‘to believe the existence of a certain state of things’ and operates so as to prevent A ‘from ‘averring against [B] a different state of things as existing at the same time’. It is therefore no surprise that, in Jorden v Money , 20 the House of Lords confirmed that the doctrine of estoppel by representation cannot assist B where he has relied not on a statement of existing fact but rather on a statement or promise as to how A will act.

This point did not escape the chief judicial progenitor of the modern doctrine of promissory estoppel: in Central London Property Trust Ltd v High Trees House Ltd , 21 Denning J both noted the limit imposed on preclusionary estoppel by the decision in Jorden v Money and specifically stated that the principle he was applying was not an example of estoppel. 22 It is clear from a later extra-judicial contribution, significantly entitled ‘Recent Developments in the Doctrine of Consideration’, 23 that Denning LJ saw the High Trees case not as establishing an equitable equivalent to estoppel but rather as providing an equitable analogue to consideration, just as the approach he applied in Solle v Butcher 24 was an equitable supplement to the common law rules on mutual mistake in contract law. 25 When the High Trees principle gained acceptance under the moniker of promissory estoppel, 26 it seems that Lord Denning was happy to accept that label; 27 the important issue, after all, was that the principle should be accepted.

It is, therefore, clear that two of the most important equitable estoppel decisions — Thorner v Major and High Trees —should not be viewed as examples of estoppel. These two cases, moreover, are far from exceptional. The promise-detriment principle applied in Thorner , for example, has been applied to determine rights not only to a farm in Somerset, but also to farms in Lincolnshire, 28 in North Yorkshire, 29 and in St Lucia; 30 to a house-boat in Chelsea and a flat in Jamaica; 31 to a hotel in North West Wales 32 and houses in New South Wales; 33 to walk on a stairway in London’s East End 34 and through a school in Ireland’s Westmeath. 35 In fact, as will be seen, the great majority of equitable estoppel cases depend on principles that are wholly distinct from the classic preclusionary doctrine of estoppel.

There are two ways in which we might attempt to defend this curious position; neither succeeds. First, there is the ‘What’s in a name?’ defence—as long as lawyers and the courts are clear about the nature and content of the principles applied, the label given to those principles is irrelevant. There are two difficulties with this defence: one particular to this context; the other of more general application. The first is that, in this area, an inappropriate name is especially inapt. The concept of estoppel, as discussed above, has a strong metaphorical aspect: the parties are treated as if a certain state of affairs were true. If it is then to be said that the term equitable estoppel employs the word estoppel in a non-literal sense, we have a metaphor about a metaphor; 36 this may be too meta- for most. The general difficulty—demonstrated dramatically by the fate of the first person to ask ‘What’s in a name?’ 37 —is that names do matter. Even if only used as a metaphor, a label will be taken literally by someone, somewhere. This is of course a particular concern when considering legal principles, which ought to be capable of being understood by those whose rights they determine. Indeed, as evidenced by the House of Lords’ decision in Cobbe v Yeoman’s Row Management Ltd , 38 even the highest courts may be misled by a metaphorical label.

[a]n ‘estoppel’ bars the object of it from asserting some fact or facts, or, sometimes, something that is a mixture of fact and law, that stands in the way of some right claimed by the person entitled to the benefit of the estoppel. The estoppel becomes a ‘proprietary’ estoppel – a sub-species of a ‘promissory’ estoppel – if the right claimed is a proprietary right, usually a right to or over land but, in principle, equally available in relation to chattels or choses in action. So, what is the fact or facts, or the matter of mixed fact and law, that, in the present case, [A] is said to be barred from asserting?

On that analysis of equitable estoppel, even if A makes a clear promise to B that A will give B a right in A’s land, B can have no proprietary estoppel claim. On that analysis, Thorner v Major and the great number of similar decisions made across the common law world have to be justified, if at all, on the basis that B’s right arose through some means other than equitable estoppel. Lord Scott’s attempt to account for some of those decisions serves merely to highlight the impossibility of such a general re-analysis. For example, Crabb v Arun District Council 43 fell into the general factual outline set out above: following negotiations with A, B acted in reliance on the belief that a contract would be concluded between the parties and that A would grant B a right of way over A’s land. The Court of Appeal held that proprietary estoppel imposed a duty on A to grant B the promised right of way. In Cobbe , Lord Scott explained the decision as depending on A’s having made a representation to B that B already had a right of way over A’s land: 44 following B’s reliance on that representation, A was barred from asserting that B did not have such a right. Yet in Crabb , it had been clear throughout the parties’ negotiations that B would pay A for the grant of a right of way; in the absence of such payment or any request for it from A, B could not reasonably have believed that he already had a right of way over A’s land.

In Thorner , Lord Scott was also driven to adopt a remedial constructive trust analysis in order to explain cases, such as Thorner itself, in which B’s successful claim was incontrovertibly based on a promise that B would acquire a right in the future. 45 In Cobbe , Lord Scott quite correctly insisted that a constructive trust does not arise whenever A can be said to have acted unconscionably; 46 it is therefore somewhat ironic that, in order to justify limits on the operation of the promise-detriment principle, Lord Scott was prepared to recognize a remedial constructive trust, a tool often regarded as giving a court an unjustifiably wide discretion to respond to behaviour it regards as unconscionable. 47

In Cobbe , none of their Lordships expressly disagreed with Lord Scott’s general analysis of equitable estoppel; that analysis was also adopted by the Privy Council. 48 The importance of Thorner lies in the fact that, when its application might have determined the case against David Thorner, Lord Scott’s analysis was supported by only one member of the panel: Lord Scott. The promise-detriment principle has thus demonstrated remarkable bouncebackability: shrugging off its apparent denial by the House of Lords in July 2008 to win the acceptance of the same court in March 2009. As an interpretation of the general, preclusive concept of estoppel, Lord Scott’s analysis is faultless; that is precisely why it cannot possibly explain the nature and operation of equitable estoppel.

This leads to the second argument that might be used to defend the term ‘equitable estoppel’. It focuses on the adjective, and urges us to remember that, as its principles were developed by the Chancery courts, we should not expect equitable estoppel to resemble its common law cousin. Like the first argument, this defence fails, and its rebuttal involves both a particular and a general point. First, it is not possible to see equitable estoppel as simply a more liberal form of the preclusive common law doctrine. The very logic of estoppel, rather than any policy choice, dictates its common law limits: a preclusionary doctrine cannot determine the legal effect of a promise as to A’s future conduct. This is not to say that it was impossible for courts of equity to recognize and apply such a preclusionary doctrine; on the contrary, it is clear that they did just that. 49 The point is rather that such courts were applying the same doctrine as applied by the common law courts, subject to the same constraints. In the first edition of George Spencer Bower’s The Law Relating to Estoppel by Representation , 50 the index includes an entry reading: ‘Equitable Estoppel, a meaningless expression.’ To the extent that the observation is amusing, it is because of its truth: whilst courts of equity did recognize and apply a doctrine of estoppel by representation, it did not differ from that operating at common law, and so referring to it by a separate name can only cause confusion.

In contrast, the 27th edition of Snell’s Equity , published exactly 50 years after Spencer Bower’s work, devoted a chapter to ‘Equitable Estoppel’ and began by noting that ‘Equity developed a system of estoppel which supplemented the rather narrower rules at common law.’ 51 This is not, however, the best way to understand promissory estoppel or proprietary estoppel, the two doctrines examined in that chapter of Snell’s Equity . The classic model of equity as supplementing and refining a narrow common law doctrine cannot be applied here, as it disguises the fundamental differences between principles that may determine the legal effect of a promise made by A and those which instead preclude A from denying the existence of a particular state of affairs. It is also impossible to defend as a matter of authority: the House of Lords’ decision in Jorden v Money 52 was made on an appeal from a court of Chancery and so, as a matter of precedent as well as of principle, its limits apply in equity as well as at common law.

As noted above, Lord Denning was aware of that first point; the second, general point, however, escaped him. For there is a general flaw in the assumption that it is possible for estoppel to operate differently in equity as opposed to at common law, a flaw that also deals a fatal blow to Lord Denning’s attempts to create distinct equitable doctrines of consideration or common mistake. The defect, exposed by Andrew Burrows, 53 is that we can never justify differences between principles of English law by simply referring to their jurisdictional origin: it makes no sense for common law and equity to give different answers to the same question. 54 Yet this defect is evident throughout private law: a promise of future action cannot be the basis of an estoppel at common law, only in equity; choses in action cannot be assigned at common law, only in equity; set-off is not permitted in common law, only in equity; a trustee owns property at common law, the beneficiary owns it in equity. On one view, at least, the ability to hold two opposed ideas in the mind at the same time, whilst retaining the ability to function is the test of a first-rate intelligence; 55 it is not, on any view, something that a legal system should require of its subjects.

This is not to say that the specific principles referred to as equitable estoppel; equitable assignment; equitable set-off; or equitable property rights are, in themselves, unjustifiable. The point is to explain those principles, not to explain them away. And it can be argued that an adequate explanation depends on accepting that the names we currently use are deeply misleading. 56 Indeed, the rules can be justified only because the labels are misleading. Take, for example, an equitable assignment to B of A’s chose in action against X. It would be impossible to justify a principle that, whilst A’s right has not been transferred at common law, it has been transferred in equity. A right is either transferred or it is not; understanding equitable assignment does not require knowledge of quantum states. The solution is that an equitable assignment does not involve a transfer of A’s chose in action to B: 57 even after such an assignment, it is A, and only A, who can sue X. 58 The rules on equitable assignment do not contradict the basic rule that a standard chose in action cannot be transferred; they rather answer the different question of whether A has come under a duty to B in relation to the chose in action that A continues to hold against X. 59 The informing idea behind equitable assignment (and equitable set-off) is not that we do this at common law, and that in equity. It is rather that we don’t do this at common law, and we pretend to do it in equity. To view the equitable doctrines clearly, therefore, we need to see beyond the inaccurate labels. This means that, in order adequately to explain the results of cases, it may be necessary to reject the conventional terminology employed by the courts. To speak metaphorically again, it is sometimes necessary to look a judge in the eye and tell him exactly why he is right.

Arguments against prevailing terminology are often regarded as tiresome, and can be made only with great persistence. Where everyday usage is concerned, for example, many battles are not worth fighting: there a few things less productive than being a militant grammarian. In law, however, the consequences of errors are greater, and the stakes correspondingly higher. In the particular context of estoppel, we have already considered the dangers of Lord Scott’s analysis in Cobbe . A similar recent example, demonstrating the wider problem of the adjective equitable, is provided by the Court of Appeal’s decision in Shell UK Ltd v Total UK Ltd . 60 It was held there that, where physical property, title to which is held by A on trust for B, is carelessly damaged by X, B can sue X to recover consequential losses suffered by B, as long as A is joined to the action. This was the first time that such a claim had been recognized anywhere in the common law world. The decision was made in the face of clear authority to the contrary 61 and has attracted sustained critical disapproval. 62 How did the Court of Appeal make such an error? A central part of its reasoning was that, as a trust beneficiary is the ‘real’ owner of the trust assets, it would be ‘legalistic’ to deny that beneficiary the rights permitted to other owners. 63 It was precisely a reliance on the conventional terminology, and a literal reading of the metaphorical term ‘equitable ownership’, that caused a departure from the law’s previously clear position. 64 The decision thus demonstrates that upholding the existing rules may require a departure from the existing names.

It therefore seems that a proper understanding of equitable estoppel can be achieved only if we reject the metaphors and misleading terminology that currently bedevil the doctrine. Our aim should instead be to uncover, and describe accurately, the specific principles that make up each of promissory estoppel and proprietary estoppel. It will be suggested that there are five such principles.

Principle 1: A’s Acceptance of B’s Substitute Performance

The principle applying here is that: (i) if B owes a duty to A; and (ii) B tenders, and A accepts, particular action (or inaction) by B as performance of that duty; then (iii) B’s duty is discharged even if, in the absence of such acceptance from A, B’s action (or inaction) would not have discharged that duty.

This principle, it is submitted, is the one recognized by Denning J in what has become the foundation of the modern law of promissory estoppel: his ‘brilliant obiter dictum’ 65 in Central London Property Trust Ltd v High Trees House Ltd . 66 The association of that judgment with the equitable doctrine of promissory estoppel is somewhat odd. First, as we have seen, Denning J made it very clear that his decision in that case did not depend on estoppel. 67 Secondly, contrary to Denning J’s analysis, the principle does not seem to depend on A’s having made a promise. Thirdly, and again contrary to Denning J’s view, the principle does not appear to be peculiarly equitable.

As to the second point, it is submitted that the principle gives effect to A’s actual consent in accepting the substitute performance, rather than to A’s promise to accept such performance. The principle also differs from the promise-detriment principle as it is not focused on the need to prevent B’s suffering a detriment as a result of A’s promise: in High Trees itself, B’s action (paying a lower rent) was beneficial to B and B was not required to show that it would suffer any specific hardship if asked to pay the contractually due rent. As to the third point, the principle is also recognized at common law. For example, in discussing the common law rules on waiver, Treitel’s Law of Contract states that: ‘If the varied performance is actually made and accepted, neither party can claim damages on the ground that performance was not in accordance with the original contract.’ 68 Indeed, the application of that common law doctrine, sometimes referred to as total waiver, 69 is confirmed by section 11(2) of the Sale of Goods Act 1979 and was demonstrated by the decision of Gloster J in The Bunga Saga Lima . 70

In High Trees itself, it was for reasons of authority, rather than of principle, that Denning J invoked equity. The decision of the House of Lords in Foakes v Beer 71 appears to establish that the general principle, operating where A accepts substitute performance from B, cannot apply where B owes a debt to A and A accepts a lower sum in discharge of A’s duty. As Lord Denning MR later noted, 72 there are good reasons for thinking that such a restriction is unjustified in principle; 73 the decision in Foakes itself can also be explained on a different basis. 74 Nonetheless, no first instance judge, not even Denning J, would wish to have challenged the conventional understanding of Foakes . His Lordship, therefore, adopted one of his favourite tactics: 75 the inconvenient rule was characterized as arising at common law; and an equitable exception was found. That equitable concept was said to be derived from decisions such as Hughes v Metropolitan Railway Co . 76 As will be seen, however, the principle applied in that case is quite different to one based on A’s acceptance of a substitute performance and, indeed, has no application to cases such as Foakes or High Trees .

Principle 2: The Encouragement-Benefit Principle

The principle applying here is often referred to as the principle in Hughes v Metropolitan Railway Co . 77 It might be thought that principles named for cases are inherently dubious: we should identify principles by their content and basis, not by examples of their application. The primary purpose of a name, however, is to provide a convenient and not inaccurate means of identification. The use of a case name may simply mean that a principle’s direct explanation is a mouthful, not a mirage.

Certainly, the principle has a number of elements. A’s receipt of a potential benefit, as a result of action taken by B in reliance on a belief encouraged by A, is a necessary, but not a sufficient, condition of its operation. The principle applies only where A claims to have acquired a right as a result of particular action or inaction by B. If B’s action or inaction was influenced by a belief, encouraged by A that, if B acted or failed to act in that way, A would not acquire, or would not enforce, the right in question, A will be prevented from taking or exercising the benefit of that right.

In Hughes v Metropolitan Railway Co , 78 for example, 79 A claimed to have a right to terminate B’s lease, that right arising as a result of B’s failure to complete repairs before the end of a stipulated six-month period. During that period, A and B had entered into negotiations as to B’s surrender of the lease to A and A had agreed to B’s deferring the repairs whilst the negotiations took place. 80 As a result, A had led B reasonably to believe that B’s inaction in failing to complete repairs before the end of the initial six months would not give A a right to terminate the lease. B’s decision not to undertake the repairs in that period was influenced by this belief. A was, therefore, not allowed to profit from B’s inaction by forfeiting the lease. The period for completion of the repairs had to be extended, so that the six-month clock did not run during the parties’ negotiations. As B had completed the repairs within the extended period, A had no right to forfeit the lease.

The principle differs from the promise-detriment principle in a number of important ways. First, in Hughes , it was emphasized that, given the dealings between A and B, it would have been inequitable for A to enforce a forfeiture against B. 81 It is worth noting that the focus of both the Court of Appeal and the House of Lords was on the injustice of A’s acquiring the benefits that would come from forfeiture. 82 It seems that the principle has the purpose of ensuring that A does not acquire a legal benefit by acting inconsistently with the belief of B encouraged by A. 83 In cases where the right on which A seeks to rely is a right against B, the principle can have the effect of allowing B to avoid a detriment. Such detriment, however, is not required for the operation of the principle; and, if the principle does apply, its effect may go beyond simply preventing B’s suffering a detriment. 84

Secondly, the principle does not seem to require A to have made a promise to B. 85 Rather, it suffices if A, even by non-promissory encouragement, has led B to believe that A will not acquire, or will not enforce, a particular right. 86 The principle is in some way analogous to that supporting an unjust enrichment claim premised on the transfer of a right by B to A and a subsequent failure of consideration: no promise is required, as it suffices that the legal benefit received by A was acquired through action undertaken by B on a particular basis know to, and shared by, the parties. 87

Thirdly, when it applies, the encouragement-benefit principle simply serves to prevent or restrain A’s exercise of a right against B. As a result, unlike the promise-detriment principle, it cannot give B an independent cause of action against A.

This analysis of the principle applied in Hughes explains why, contrary to the suggestion of Denning J in High Trees , it cannot apply in a case where A promises to accept a lower sum from B in discharge of a debt owed to A by B. If A then reneges on that promise and seeks to enforce the full debt, A is not asserting any right acquired as a result of action or inaction induced by A’s promise; A’s right to the debt existed before, and independently of, A’s promise to accept the lower sum. This may help to explain why the House of Lords in Foakes v Beer made no reference at all to Hughes , a case decided only seven years earlier, and by two of the Law Lords (Lords Blackburn and Selborne) on the panel in Foakes .

Like the acceptance of substitute performance principle (Principle 1), the encouragement-benefit principle (Principle 2) does not depend on estoppel: it can apply where B’s belief is as to how A will act in the future and its focus seems to be on A’s benefit rather than B’s detriment. It also seems that, like Principle 1, Principle 2 is not distinctly equitable. First, it can be seen in parts of the doctrine of common law waiver or forbearance. For example, A may have a power to terminate a contract if B fails to perform by an agreed date. A may then agree to B’s performing after that date. If B, in reliance on that promise, fails to perform by the initially agreed date, courts of common law would also recognize that A has no power to terminate the contract. 88 Secondly, a similar principle can be seen in cases relating to licences of land. A’s consent aside, if B enters A’s land without authority, A acquires particular rights against B, in particular a liberty to use reasonable force to remove B from the land and a power to claim damages from B. If A invites B onto A’s land, A’s consent clearly prevents those rights from arising. If B’s licence is purely gratuitous, A may choose to revoke his consent at any time. If, however, A does so after B has entered onto A’s land, A cannot assert a right consequent on B’s unauthorized presence on B’s land (such as a liberty to use reasonable force to remove B from the land) 89 unless A has first given B a reasonable period to leave the land. 90

Principle 3: The Promise-Detriment Principle

The principle, therefore, presupposes three things: (1) a legal relationship between the parties; (2) a representation, express or implied, by one party that he will not enforce his strict rights against the other; and (3) reliance by the representee (whether by action or by omission to act) on the representation, which renders it inequitable, in all the circumstances, for the representor to enforce his strict rights, or at least to do so until the representee is restored to his former position.

The use of such a test makes clear that it would be a serious mistake to equate the current law of promissory estoppel with the principle proffered by Denning J in High Trees : that a promise made by A, if it is intended to be binding and is intended to be acted on by B will, if so acted on, bind A. The key difference rests in Goff J’s reference to the question of whether it would be inequitable for A to enforce his or her strict rights. If not given more concrete form, that question would of course be a very difficult one to apply consistently. Principle 3 can provide that precision, by making clear that, in judging inequity in this particular context, the crucial issue is as to the prospect of B’s suffering a detriment. So, whilst Denning J’s principle (like Principles 1 and 2) can apply even if B would suffer no detriment were A to renege on the promise, Principle 3 cannot: in the absence of such detriment, it would not be inequitable for A to enforce his or her strict rights. Similarly, whilst Denning J’s principle operates to enforce A’s promise, 93 Principle 3 need not: there may be some other means by which A can ensure that B suffers no detriment and, if such means is employed then, again, it is not inequitable for A to enforce his or her strict rights. 94

The reference in Goff J’s test to A’s enforcement of strict rights shows, however, that one important aspect of Denning J’s principle continues to be very influential in English law. In High Trees , that principle was said by his Lordship to resemble estoppel in only one sense: it does not give rise to a cause of action. As is clear from his extra-judicial analysis, 95 that limit was of little practical concern to Lord Denning. His view was that, as a general rule, if A makes a promise which is intended to be binding, and to induce action or inaction from B, then such action or inaction from B will constitute consideration and so A’s promise will be binding as a matter of contract law. As a result, there was no general need for the principle identified by his Lordship in High Trees to create a cause of action: in most cases, if the principle applied, A’s promise would in any case be contractually binding. Denning LJ was, therefore, somewhat disingenuous when stating in Combe v Combe that the ‘doctrine of consideration is too firmly fixed to be overthrown by a side-wind’; 96 it was in fact the flexibility of that doctrine, at least as seen by his Lordship, that meant that there was no general need to supplement the common law definition of consideration with a wider equitable test.

In fact, on Lord Denning’s analysis, there were only two specific areas in which an equitable gloss was required. First, in cases involving the modification or discharge of a contract: if B’s action or inaction simply consisted of B’s performing an existing contractual duty to A, then that conduct could not count as consideration. Secondly, in cases where a formality rule prevented A’s promise from giving B an enforceable contractual right. The principle formulated by Denning J in High Trees addressed the first problem, and so needed to operate only in cases where A sought to enforce a pre-existing right against B. Promises relating to land formed the most significant group of cases in which the second problem arose. In such cases, it seems, Lord Denning regarded proprietary estoppel as the vehicle for applying the general principle that a promise intended to be binding, and intended to induce action or inaction from B, will be binding if followed by such action or inaction. 97

Two conclusions can be drawn from this discussion. First, this strand of promissory estoppel is better seen not as resting on Denning J’s principle, but rather as an application of Principle 3. Secondly, his Lordship’s general view of the law has had a profound influence: in English law at least, Principle 3 is regarded as applying only to promises to forego rights (promissory estoppel) or to promises relating to land (proprietary estoppel). The first of those limits has gained some support from a false analogy with estoppel, expressly disowned by Denning J in High Trees . As we have seen, no promise-based principle can truly be based on estoppel; the estoppel analysis, therefore, cannot justify limiting Principle 3 to promises to forego rights. The crucial question is whether there is any other means of justifying that limit, and the fact that it seems to be happily ignored when A’s promise relates to land. As has been seen, on the analysis of Denning J, the bar on promissory estoppel operating as a cause of action, and the ability of proprietary estoppel to do so, made perfect practical sense. As a matter of principle, however, that position is very hard to justify and it is little surprise that it has been rejected in other common law jurisdictions. 98 If, for example, the limit is said to be necessary in order to avoid undermining the doctrine of consideration, then it seems strange that, where land in concerned, Principle 3 can be used to bypass not only that doctrine, but also the formal requirements for contracts relating to the sale or other disposition of an interest in land.

Promissory Estoppel: Conclusions

In 1972, Lord Hailsham remarked that ‘the whole sequence of cases based on promissory estoppel since the war … raise problems of coherent exposition which have never been systematically explored’. 99 It has been suggested that the doctrine can be understood only if we disaggregate its three constituent principles. For example, there is currently uncertainty as to whether B, a party seeking to establish such an estoppel, must show that he would suffer some detriment if A, the other party to the alleged estoppel, were to renege on his or her promise to B. 100 That question cannot be solved if we simply ask whether the prospect of detriment is a requirement of promissory estoppel. Rather, each of the constituent principles must be examined separately. Principle 1 clearly does not depend on the prospect of detriment: in High Trees itself, for example, paying a lower sum than that contractually due did not expose B to the risk of detriment. Principle 2 usually does involve the prospect of detriment but, as it is focused on avoiding A’s acquisition of an unjust benefit, it seems that such detriment is not required. The prospect of detriment is, in contrast, central to Principle 3.

An analysis of promissory estoppel as resting on three distinct principles clearly does not bode well for the argument that equitable estoppel can be seen as a unified whole. Indeed, the failure to distinguish between those principles explains some of the confusion in the current law. For example, in Collier v P & MJ Wright (Holdings) Ltd , 101 counsel for each of A and B relied on a unitary test for promissory estoppel, with B arguing that, having ‘conducted his affairs’ and undertaken ‘new commitments’ on the basis of A’s promise not to enforce B’s full debt, he would now suffer a detriment if A were able to act inconsistently with that promise. Yet in High Trees , of course, there was no such evidence that B would suffer a detriment if A were free to assert its contractual right: such detriment is not a requirement of Principle 1. The difficult point in Collier , as in High Trees , is whether Foakes v Beer prevents Principle 1’s application where A accepts a lower sum from B in discharge of a debt. In High Trees , Denning J skillfully avoided that question by resorting to equity and relying on Hughes . The wool has remained over our eyes ever since. In fact, additional layers of obscurity have been added: in High Trees , at least, Denning J made clear that A’s inability to claim the contractual rent for 1940–44 had nothing to do with estoppel.

It would, therefore, be a mistake to regard the three principles identified so far as part of a single doctrine. It would be an even greater mistake to refer to such a doctrine as equitable estoppel. None of the three principles is purely equitable and none of the three principles is based on estoppel. It is important to note that Principles 1 and 2 do share a characteristic with estoppel: neither generates a cause of action. This is because Principle 1 specifies when an existing duty of B to A may be discharged, and Principle 2 provides a means by which A may be prevented from acquiring or exercising an immunity, liberty, claim-right, or power against B. In English law, it has also been consistently assumed that Principle 3, when applied under the guise of promissory estoppel, is similarly incapable of giving rise to a cause of action. There are, however, good reasons to doubt the validity of that limit. First, once Principle 3 is separated from Principles 1 and 2, it becomes clear that it need not have the same effect as those quite different principles. Secondly, once the estoppel label is rejected, it becomes clear that Principle 3 need not have a purely preclusive effect. Thirdly, as will now be seen, the restriction on Principle 3 disappears when it goes under the name of proprietary, rather than promissory, estoppel.

Principle 3: The Promise-Detriment Principle (Again)

Cases based on the promise-detriment principle, such as Thorner v Major , now make up the most prominent strand of proprietary estoppel. As is the case with promissory estoppel, the law in this area has developed very rapidly: the promise-detriment principle, like the very term proprietary estoppel, was not known to lawyers practising 50 years ago. 102 This does not mean, however, that the results recently reached by the courts have been wholly novel.

For example, consider a case in which A persuades B to continue as his live-in carer by promising to leave her, in his will, the right to take, for her life, the rents and profits on two of A’s properties. B then continues to care for A until A’s death, three years later. A’s will does not provide the promised benefits to B. B claims that, having performed her side of the parties’ agreement, she should now receive the benefits promised by A or, at least, proper remuneration for the time spent caring for A. The court finds that, as A’s representation was made for the purpose of influencing B’s conduct, and was acted on by B, an equitable claim arises in B’s favour, and this claim binds the property to which A’s representation related, so that A, at his death, was obliged to perform his promise to B. It would be no surprise to find a contemporary court reaching such a result through the application of proprietary estoppel. The case described— Loffus v Maw —was, however, decided by Sir John Stuart V-C in 1862. 103

The decision in Loffus was one of the very last to be based on the equitable doctrine of ‘making representations good’. 104 The tensions that soon led to the collapse of that doctrine are evident in the judgment. Sir John Stuart V-C attempted to buttress the equitable doctrine by referring to Lord Denman’s analysis of the common law in Pickard v Sears . 105 That earlier decision, however, is a straightforward example of the application of estoppel by representation; Lord Denman’s formulation of principle is limited to cases in which A, by his words or conduct, wilfully causes B to believe the existence of a certain state of affairs. As the House of Lords had already confirmed in Jorden v Money , 106 this preclusive analysis cannot apply where A has instead made a promise as to A’s future conduct. In Loffus , Sir John Stuart V-C attempted to sidestep that precedent by regarding it as ‘irreconcilable’ with the highest court’s earlier decision in Hammersely v De Biel . 107 That manoeuvre was, ultimately, unsuccessful. In Maddison v Alderson , 108 the House of Lords confirmed that ‘the doctrine of estoppel by representation is applicable only to representations as to some state of facts alleged to be at the time actually in existence’; 109 and expressly disapproved of the reasoning in Loffus , finding that the decision in Hammersley was based on the existence of a contract between A and B. The equitable doctrine of making representations good was thus dismantled, in order to preserve the primacy of the law of contract as a means for the enforcement of agreements. 110

Is the promise-detriment principle strand of proprietary estoppel, which would nowadays be used to resolve a case such as Loffus , 111 free from the flaws of its forerunner? It is suggested that two key aspects of the contemporary principle differentiate it from the defunct doctrine of making representations good. First, as it requires a promise from A, the principle cannot apply where A has merely made a representation as to A’s current intentions; as confirmed by the House of Lords in Thorner v Major , 112 B’s claim will fail if B cannot show that B reasonably understood A to have made a commitment to B. It is, therefore, clear that the justifiable restrictions placed on estoppel by Jorden v Money 113 are irrelevant, as the principle is not based on mere representations. Secondly, the promise-detriment principle can meet the charge of inconsistency with the law of contract, as it does not operate so as to make A’s promise immediately binding.

[n]one of this reasoning applies to equitable estoppel, because it does not look forward into the future and guess what might happen. It looks backwards from the moment when the promise falls due to be performed and asks whether, in the circumstances which have actually happened, it would be unconscionable for the promise not to be kept.

The decision in Walton v Walton thus makes clear that, in contrast to the principle proposed by Denning J in High Trees , the promise-detriment principle does not depend on A’s having made a promise that is intended to be legally binding. This feature of the rule is invariant to context, and applies to commercial as well as domestic situations. In Sutcliffe v Lloyd , 118 for example, Wilson LJ described as ‘misconceived in law’ 119 the argument that B’s promise-based proprietary estoppel claim should fail simply because A had not suggested to B that A’s promise was legally binding. After all, as Wilson LJ noted there, such a claim, even if successful, does not have the effect that A’s promise is immediately binding. 120

A metaphor offered by Lord Hoffmann in Thorner v Major lyrically demonstrates this important distinction between the promise-detriment principle and the binding nature of a contractual agreement. In that case, when noting that the parties’ conduct at a particular point in time could be interpreted in the light of subsequent events, Lord Hoffmann quoted Hegel: ‘The owl of Minerva spreads its wings only with the falling of the dusk.’ 121 As noted extra-judicially by Lord Neuberger, 122 the metaphor can, in fact, be applied more broadly: not only to the factual application of the promise-detriment principle, but also to its very nature. A contractual agreement imposes an immediately binding duty on A. A’s promise to give B a right in relation to A’s land, if A intends or knows that B may rely on that promise, subjects A only to a liability: if B reasonably acts in such a way that B would suffer a detriment were A to be wholly free to renege on the promise, a court may then place A under a duty to act in such a way as to ensure that B suffers no such detriment. 123 The precise content of A’s duty cannot be known until the point when A reneges on the promise as it depends on the extent of B’s prospective detriment and so may vary, for example, if countervailing benefits are received by B. 124 Certainly, even if the content of A’s promise is clear, A will not necessarily be under a duty to perform A’s promise to B. 125

The future coherence of the promise-detriment principle, and therefore of much of the current law of proprietary estoppel, depends on the courts’ keeping in mind these two key aspects of the principle: it requires a promise; but does not make promises binding. Unfortunately, the security of those two points is jeopardized, both by the use of the term estoppel, and by a tendency to assume that a single test must apply to all cases of proprietary estoppel. The influence of the estoppel label can be seen in formulations of proprietary estoppel that require A only to have made a representation or to have encouraged B to believe that A will act in a particular way in the future. 126 Such formulations were fostered by Lord Denning MR’s willingness to blend the encouragement-benefit principle (Principle 2) and the promise-detriment principle (Principle 3) in an undifferentiated notion of estoppel. In Crabb v Arun District Council , 127 for example, his Lordship referred to Cotton LJ’s analysis in Birmingham & District Land Co v London and North Western Railway Co 128 in order to support a conclusion that an equitable estoppel could be established in the absence of a promise by A. In Crabb , however, the application of Principle 2 would have been of no assistance to B, who was not seeking to prevent A’s exercise of a right arising as a result of B’s conduct. B rather wished for the court to enforce a liability of A to ensure that B suffered no detriment as a result of his reasonable reliance on a belief that A would grant B a right of way over A’s land. Such a liability should arise only if A has made an express or implied promise to B. 129

The risk here is that the bar for a proprietary estoppel claim will be set too low: as a matter of principle, it is very difficult to see why, in the absence of a commitment by A, it is A rather than B who should bear the risk of B’s suffering a detriment as a result of B’s choice to rely on a belief as to A’s future action. 130 There is some evidence that the courts are alert to this danger. In Cobbe v Yeoman’s Row Management Ltd , 131 for example, A clearly encouraged B to believe that it would enter into a contract to sell its land to B; yet B’s proprietary estoppel claim failed as A had not promised to act in that way. In Thorner v Major , it was recognized at first instance, 132 in the Court of Appeal, 133 and in the House of Lords 134 that B’s claim could succeed only if A had made an assurance (synonymously, a promise or commitment) that A would leave his farm to B. At the same time, however, general formulations of the test for proprietary estoppel rarely specify that A must have made a promise to B; instead, emphasis is placed on the need for a representation by A, or for A to have encouraged a belief of B. Such formulations are the product, in large part, of a misplaced desire to proffer a single test for all cases of proprietary estoppel, which must be broad enough to catch those strands of the doctrine that do not depend on A’s having made a promise to B. Such a test, however, cannot exist, as those two further strands of proprietary estoppel are clearly based on independent principles.

Principle 4: Acquiescence by A in B’s Mistaken Belief as to B’s Current Rights

[i]f a stranger begins to build on my land supposing it to be his own, and I, perceiving his mistake, abstain from setting him right, and leave him to persevere in his error, a court of equity will not allow me afterwards to assert my title to the land on which he had expended money on the supposition that the land was his own.

As Lord Walker noted in Thorner v Major , such ‘acquiescence’ or ‘standing-by’ cases can only be brought within a unitary test for proprietary estoppel, based on assurance, reliance, and detriment, if A’s ‘conduct in standing by in silence serves as the element of assurance’. 139 Yet classic expositions of the acquiescence principle, such as that of Lord Cranworth, do not require that B even be aware of A’s failure to act. 140 In such a case it would be wholly fictional to find that any representation, much less a promise, had been made by A to B; how, for example, would a court determine the terms of such an assurance? Moreover, in a case where B is unaware of A, it is impossible to say that B has relied in any meaningful way on A.

The acquiescence principle is long-standing; has recently been recognized by the House of Lords; 141 and has reasonably clear requirements, usefully summarized by Fry J in Willmott v Barber . 142 It is based on preventing A’s taking advantage of B in a case where B has made a mistake as to B’s current rights and A, knowing both of B’s belief and the true position, has failed to take an opportunity to assert a contrary right. Its precise justification is far from clear; on any view, however, it is distinct from the promise-detriment principle. It is, therefore, worth asking how the two principles have come to be linked.

[i]f a man, under a under a verbal agreement with a landlord for a certain interest in land, or what amounts to the same thing, under an expectation, created or encouraged by the landlord, that he shall have a certain interest, takes possession of such land, with the consent of the landlord, and upon the faith of such promise or expectation, with the knowledge of the landlord, and without objection by him, lays out money upon the land, a court of equity will compel the landlord to give effect to such promise or expectation.

As Mee has suggested, 145 Lord Kingsdown’s principle clearly differs from that proposed by Lord Cranworth and accepted by the majority. It does not depend on B’s having made a mistake as to B’s current rights, but can also apply where B believes that he will acquire a right from A. On the facts of Ramsden v Dyson , this difference was a crucial one, as the tenants in that case did not claim that they had acted on the basis that they already had a long-term lease; their claim was rather that they had believed A would grant such a lease. It therefore seems that Lord Kingsdown’s dissent was based on his view that equitable intervention was also possible in that latter situation. Fermat-like, 146 Lord Kingsdown merely alluded to the proof of his theory; it seems very likely, however, that he had in mind the doctrine of making representations good. 147 On any view, however, his principle seems clearly different from the acquiescence principle set out by Lord Cranworth; the fact that the two principles appear in the same decision provides no reason to see them as part of the same doctrine.

As is the case with promissory estoppel, confusion has been caused by a failure properly to distinguish between independent principles. First, in some cases, the promise-detriment principle has been defined too narrowly owing to the application of limits that should properly regulate only the acquiescence principle. 148 In Cobbe v Yeoman’s Row Management Ltd , for example, each of Lord Scott and Lord Walker assumed that a proprietary estoppel claim can arise only if B acts on the basis of a mistaken belief as to B’s current legal rights. 149 As is clear from decisions such as Thorner v Major , such a limit does not, in fact, apply to the promise-detriment principle. The limit is, in contrast, an important part of the acquiescence principle, as confirmed, for example, by the criteria laid down in Willmott v Barber 150 and by the majority in Ramsden v Dyson . 151 For the acquiescence doctrine depends on A’s failure to assert a current right; it cannot be triggered by A’s simply failing to inform B that A no longer intends to act in a particular way in the future. 152 Secondly, as noted above, 153 the promise-detriment principle has often been defined too broadly, so as to be capable of applying whenever A has encouraged a belief of B that A will act in a particular way in the future, even if A has made no commitment. 154 It is true, of course, that the acquiescence principle can apply in the absence of a promise from A; but this does not mean that a proprietary estoppel should arise if A simply encourages B to believe that A will act in a certain way in the future, without making a promise to that effect.

It is worth noting, however, that the confusion between the acquiescence principle and the promise-detriment principle seems to have had two beneficial effects on the latter’s operation. The first consists of the use of the acquiescence principle as a means to justify the fact that, at least where A’s promise relates to land, the promise-detriment principle can generate a cause of action. The second depends on the fact that, as the acquiescence principle can apply in the absence of a promise by A, the extent of the right acquired by B cannot be determined by the content of a promise. The adoption of the same approach in promise cases has led to the important conclusion that the promise-detriment principle need not impose a duty on A to honour A’s promise to B.

As to the first point, it was seen above that, when operating under the guise of promissory estoppel, the promise-detriment principle does not operate so as to generate a cause of action. It seems that, in proprietary estoppel, the yoking of Principle 3 to the quite different acquiescence principle has played a role in allowing the principle to escape that limit. It might be thought that the acquiescence principle, like Principle 2 above, operates only to prevent the assertion of a particular right by A. For example, in Duke of Beaufort v Patrick , Sir John Romilly MR summarized the principle as meaning that ‘he who stands by and encourages an act, cannot afterwards complain of it, or interfere with the enjoyment of that which he has permitted to be done’. 155 Such a purely preclusive doctrine, however, would be difficult to apply where B has acted on a mistaken belief as to his current legal rights in A’s land. This can be seen from the facts of Duke of Beaufort itself. In that case, the court held not only that A could not seek possession of A’s land from B but also that A should be compelled to convey part of that land to B, at an appropriate price. The acquiescence principle imposed a positive duty on A to B, and thus generated a cause of action. The point seems to be that a kind of legal limbo would result if the court merely prevented A from enforcing his or her rights as legal owner of the land; the lack of a clean break between A and B might also give A further opportunities to exploit B’s position. In Duke of Beaufort itself, for example, merely restraining A’s exercise of his right would have created a situation in which A had ownership of a small part of a canal, the remainder of which was controlled by B. Neither A nor B would be able to offer a future purchaser a useful title to the relevant land, and A’s continuing ownership of part of the canal might leave B, and his successors in title, vulnerable to oppression by A, and his own successors in title.

As to the second point, the true justification for the fact that the promise-detriment principle need not lead to the enforcement of A’s promise lies in the nature of the principle itself. Its aim is to ensure that B does not suffer a detriment as a result of B’s reliance on A so, in a case where that aim can be met without requiring A to perform his or her promise, it would be disproportionate for a court to insist on such performance. 156 In practice, however, that feature has been said to arise from the fact that, when assessing how to respond to a successful proprietary estoppel claim, a court has a discretion to decide how best to satisfy the equity that has arisen in B’s favour. In Plimmer v Mayor, Councillors and Citizens of the City of Wellington , 157 for example, Sir Arthur Hobhouse, giving the advice of the Privy Council, stated that ‘the court must look at the circumstances in each case to decide in what way the equity can be satisfied’. 158 In reaching that conclusion, his Lordship relied on acquiescence cases such as Duke of Beaufort . 159 In such cases, the idea of the court’s having discretion to decide how best to satisfy an equity may have some merit. After all, there will be no promise of A to set the extent of A’s duty; moreover, in Duke of Beaufort itself, some flexibility was needed as the court had to assess the price at which A was to be compelled to transfer his estate in the land to B. The notion of an equity, and the separation it entails between the content of B’s right and the grounds on which that right arises, is much harder to justify when considering the promise-detriment principle. 160 Yet, somewhat ironically, that idea has been instrumental in the courts’ formulation of the, surely correct, view that a duty imposed on A by the promise-detriment principle need not always be a duty to perform A’s promise. 161 To mix more classical metaphors, it may be that the acquiescence principle has operated as a form of Pyrrhic Trojan Horse: in the context of promises relating to land at least, the promise-detriment principle has, by concealing itself within the acquiescence principle, gained entry into the heavily defended group of concepts capable of generating a cause of action. This process, however, has led to some of the qualities of the equine exterior being retained by the invaders inside. As a result, the hidden promise-detriment principle, even once it emerges, will not cause havoc but can instead co-exist peacefully with other well-established causes of action, such as contract law.

Principle 5: And Finally, Estoppel

It would be remiss to end this survey of equitable estoppel without noting that it is possible for the label to be applied to a case involving a true estoppel. For example, consider a case in which A states to B, his neighbour, that the boundary between their properties follows a particular path. B then relies on that statement when locating a building. It turns out that A’s statement was incorrect; part of B’s building encroaches onto A’s land. If A’s representation was clear and unequivocal, and A knew or intended that B would act on the basis of that representation, A may then be precluded from denying the truth of that statement. Such a case may fall under the general rubric of proprietary estoppel and fits with Lord Scott’s explanation of that term in Cobbe v Yeoman’s Row Management Ltd : 162 the matter that A is precluded from denying happens to relate to a proprietary right claimed by B.

There is nothing to be gained by analysing such a case as anything other than an application of the general doctrine, applying in common law as well as equity, of estoppel by representation. In Hopgood v Brown , 163 for example, the facts closely resembled the example given in the previous paragraph. A, relying on authorities applying to the acquiescence principle, argued that no estoppel could arise as, when making its representation, A was not aware of the true border between the land of A and B. Lord Evershed MR rightly rejected this submission, pointing out that the formulation in Willmott v Barber , on which A had relied, ‘was addressed to and limited to cases where the party is alleged to be estopped by acquiescence, and it is not intended to be a comprehensive formulation of the necessary requisites of any case of estoppel by representation’. 164 His Lordship thus drew an important distinction between Principle 5, which consists simply of the general doctrine of estoppel by representation, and Principle 4 (the acquiescence principle). Lord Evershed also referred to estoppel by representation as ‘really a rule of evidence’, 165 which makes clear that the principle differs from each of Principle 3 (the promise-detriment principle) and Principle 4.

Proprietary Estoppel: Conclusions

It was argued above that promissory estoppel can be understood only if we disaggregate its three constituent principles; the same is true of proprietary estoppel. Again, the failure to distinguish between discrete principles explains some of the confusion in the current law. For example, the analysis of Lord Scott in Cobbe v Yeoman’s Row Management Ltd , 166 whilst it provides an exemplary account of the operation of Principle 5, cannot serve as a general explanation of proprietary estoppel, as it does not encompass Principle 3 or Principle 4. Similarly, in Cobbe , Lord Walker assumed that a proprietary estoppel claim can arise only where B acts on the mistaken belief that he or she currently has a right in A’s land. 167 This does seem to be a requirement of Principles 4 and 5 but, as was confirmed in Thorner v Major , 168 it does not apply to Principle 3.

the application of the Ramsden v Dyson principle – whether you call it proprietary estoppel, estoppel by acquiescence or estoppel by encouragement is really immaterial – requires a very much broader approach which is directed rather at ascertaining whether, in particular individual circumstances, it would be unconscionable for a party to be permitted to deny that which, knowingly, or unknowingly, he has allowed or encouraged another to assume to his detriment than to inquiring whether the circumstances can be fitted within the confines of some preconceived formula serving as a universal yardstick for every form of unconscionable behaviour.

That influential formulation has been described as a ‘watershed’; 170 ‘what a shame’ might be a more appropriate response. For example, on Oliver J’s analysis, A’s lack of knowledge of the true position becomes simply ‘one of the relevant factors’ in the ‘overall inquiry’ as to the conscionability of A’s conduct. Yet the lack of success of the claim brought by Taylors Fashions itself 171 can be explained very simply if the three principles set out here are distinguished and applied. B claimed a right to renew its lease of A’s land, but A had made no promise to that effect, so Principle 3 could not apply; nor could Principle 5, as A had made no representation to B that B had such a right. A had not disabused B of its mistaken belief that B had such a right; but this was because A shared that belief. Principle 4, therefore, did not apply as it depends on A’s knowing that B’s belief is mistaken: in the absence of such knowledge, A cannot be said to be taking advantage of B’s position.

The second claim, brought by Old & Campbell (‘Olds’), did succeed. Olds had a lease of premises adjacent to those of Taylors Fashions. Olds’ lease with A contained a break clause, giving A the power to terminate the lease if Taylors Fashions’ lease was not renewed. The purpose of such a clause was clearly to allow A to take possession of the two premises together, if the chance arose. Olds argued that A was estopped from relying on this break clause, as A had encouraged Olds to believe that Taylors Fashions did have a right to renew its lease and, therefore, that A’s power under the break clause was unlikely to arise. Olds’ claim succeeded, as Oliver J found that A had thus encouraged Olds, and Olds had acted in reliance on its belief in such a way that it would now suffer a detriment if A were free to exercise its power under the break clause.

The success of Olds’ claim, therefore, caused a practical problem to A as it denied A the very thing that its contracts had been structured to secure: the chance to take possession of the two properties at the same time. Its success is also difficult to defend as a matter of principle. First, Principle 4 cannot apply as A did not know that Taylors Fashions had no right to renew its lease. Secondly, Principle 3 should not apply as it is seems that A had not made a promise to B that it would not acquire, or seek to enforce, the power under the break clause. After all, given their mutual misapprehension, the parties had not considered that question. At one point, Oliver J seems to regard Olds’ claim as based on a ‘representation of a present fact as regards the existence of a private right between [Taylors Fashions] and [A].’ 172 Yet it is very difficult to regard Principle 5 as applicable. For even if A were precluded from denying the validity of Taylors Fashions’ option to renew, that would not prevent A’s acquiring the power to terminate Olds’ lease: the condition on which that power arose related not to the validity of Taylors Fashions’ option to renew, but to its exercise, and A had made no representation that the option had been exercised.

Taylors Fashions thus neatly demonstrates two of the chief problems of a failure to separate out the constituent principles of proprietary estoppel. First, the law is less clear, as the specific basis of a decision is lost amongst the miasma of unconscionability. Secondly, the courts may fall into error, as that fog also obscures logical restrictions on the individual principles: for example, the requirement, if B’s claim is based simply on a belief that A would act in a particular way, that A must have made a promise to act in that way.

As regards equitable estoppel, the general conclusions of this article are clear. First, it would be a serious error to regard promissory estoppel and proprietary estoppel as simply examples of an overarching concept of equitable estoppel. In fact, the better path leads in the opposite direction: the law can be understood only if we isolate and examine the specific, discrete principles on which each doctrine is based. Secondly, our chances of comprehending the law are greatly increased if we reject misleading metaphors and labels. For example, one of the most pressing problems in this area is whether, in English law as in other common law jurisdictions, the promise-detriment principle should be allowed to operate even if A’s promise to B is neither a promise to forego a right nor a promise to give B a right in relation to A’s land or other property. 173 That question can be answered only if we focus clearly on the nature and logic of that principle and discard the notion that it is a form of estoppel, or peculiarly equitable.

As regards private law more generally, it is worth noting that one of the very few useful metaphors in this area, borrowed by Lord Hoffmann from Georg Hegel, may assist us to understand not only the promise-detriment principle, but also the wider task of comprehending judge-made law. The challenge of engaging with the treasure trove of precedent was noted at the very start of this article. The task is complicated by the fact that the common law never stops developing: dusk never comes, and so the owl of Minerva, like Godot, never appears. As a result, it is not darkness that prevents us from seeing things clearly; we are rather dazzled by the eternal sunshine of the common law. The lesson of Hegel’s metaphor may, therefore, be that we can never fully understand judge-made law; but the task’s impossibility does not lessen its necessity.

This article is based on my inaugural lecture, which was given at the UCL Faculty of Laws on 21 February 2013. In my work on estoppel, I have benefitted greatly from working with co-authors: Susan Bright, Donal Nolan, and Andrew Robertson, and from discussions with each of John Mee and Jason Neyers. I am also grateful to the Leverhulme Trust for the support provided by a Philip Leverhulme Prize, and to Lord Neuberger of Abbotsbury for having chaired the lecture on which this article is based.

1 [2009] UKHL 18, [2009] 1 WLR 776.

2 Estoppel by convention is not considered here. In ING Bank NV v Ros Roca SA [2011] EWCA Civ 353, [2012] 1 WLR 472 [73] Carnwath LJ referred to estoppel by convention or acquiescence as an ‘equitable doctrine’ and at [76] Stanley Burnton LJ saw the distinction between promissory estoppel and estoppel by convention as ‘largely one of terminology’. E Peel (ed), Treitel’s Law of Contract (13 th edn, Sweet & Maxwell 2011) para 3-097 notes that estoppel by convention instead seems closer to estoppel by representation, as it does not specify the legal effects of a promise but is rather used to determine whether a promise has been made.

3 See eg E Cooke, The Modern Law of Estoppel (OUP 2000) esp chs 4 and 8; Lord Neuberger of Abbotsbury, ‘The Stuffing of Minerva’s Owl? Taxonomy and Taxidermy in Equity’ [2009] Cambridge Law Journal 537, 547–49; Lord Denning MR in Amalgamated Investment & Property Co Ltd (in liquidation) v Texas Commerce International Bank Ltd [1982] QB 84 (CA) 122; Scarman LJ in Crabb v Arun District Council [1976] Ch 179 (CA) 193; Neuberger LJ in Steria Ltd v Hutchison [2006] EWCA Civ 1551, [2007] ICR 445 [87]–[95].

4 (1988) 164 CLR 387.

5 Westpac Banking Corporation v The Bell Group Ltd (in liquidation) (No 3) [2012] WASCA 157, (2012) 89 ACSR 1.

6 Harrison v Harrison [2013] VSCA 170 [138]. Saleh Ltd v Romanous [2010] NSWCA 274, (2010) 15 BPR 29, 505. See too the analysis of Handley AJA in DHJPM Pty Ltd v Blackthorn Ltd [2011] NSWCA 348, (2011) 285 ALR 311.

7 The three promissory estoppel principles identified in this article were set out in B McFarlane, ‘Promissory Estoppel and Debts’ in A Burrows and E Peel (eds), Contract Formation and Parties (OUP 2010); the three proprietary estoppel principles were set out in J Mee, ‘Proprietary Estoppel, Promises and Mistaken Belief’ in S Bright (ed), Modern Studies in Property Law , vol 6, (Hart 2011) 175.

8 As Lord Walker noted in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752 [48]: ‘synthesis and unification, however desirable as objectives, have their dangers’. On the view adopted here, there is an ironic truth to Robert Goff J’s statement in Amalgamated Investment & Property Co Ltd (in liquidation) v Texas Commerce International Bank Ltd [1982] QB 84, 103 that: ‘As a separate category, proprietary estoppel may perhaps be regarded as an amalgam of doubtful utility.’ His Lordship’s point there was not that the doctrine should be broken down further, but rather that it should not be distinguished from the broader concept of equitable estoppel; Goff J approved (at 103–04) of ‘a tendency in the more recent authorities to reject any rigid classification of equitable estoppel into exclusive and defined categories’.

9 For example, in Westpac (n 5), Drummond AJA at [1748]–[1749] held that, whilst ‘vague and imprecise conduct is often enough to give rise to an equitable proprietary estoppel … certainty of the representation or promise remains a requirement of promissory estoppel’. It would be surprising, however, if the test applying to proprietary estoppel were easier for B to establish that that applying to promissory estoppel, as the former doctrine, unlike the latter, can operate as a cause of action. On the view set out here, if the principle to be applied is the ‘promise-detriment’ principle then, whether it is applied under the label of promissory estoppel or proprietary estoppel, the same test must apply. The distinction noted by Drummond AJA in fact seems to be a distinction between the test applied to acquiescence principle (see below, text from n 135) and that applied to the quite different promise-detriment principle.

10 For discussion see eg N McBride, ‘A Fifth Common Law Obligation’ (1994) 14 Legal Studies 35; R Halson, ‘The Offensive Limits of Promissory Estoppel’ [1999] Lloyds Maritime and Commercial Law Quarterly 256; J Moncrieff and J Neyers, ‘(Mis)understanding Estoppel?’ [2003] Lloyds Maritime and Commercial Law Quarterly 429; D Nolan ‘Following in Their Footsteps: Equitable Estoppel in Australia and the United States’ (2000) 11 Kings College Law Journal 202; B McFarlane, ‘The Protection of Pre-Contractual Reliance: A Way Forward?’ (2010) 9 Oxford University Commonwealth Law Journal 95.

11 Amalgamated Investment & Property Co Ltd (in liquidation) v Texas Commerce International Bank Ltd [1982] QB 84 (CA) 122.

12 E Coke, The First Part of the Institutes of the Law s of England, or, a Commentary upon Littleton (Co Litt ) (Flesher et al, 1629), 352a. For fuller discussion see Cooke (n 3) ch 2.

13 See eg Vervaeke v Smith [1983] 1 AC 145 (HL); Republic of India v India Steamship Co Ltd [1993] AC 410 (HL) 422.

14 See eg Roberts v Karr (1809) 1 Taunt 495, 127 ER 495.

15 The term ‘in pais’ shares its origin with the modern French ‘pays’ and Coke explains that an estoppel in pais need not involve writing but arises in the country. In other words, it can be established by the jury’s acceptance of the facts on which B’s claim is based, even in the absence of written proof: see Cooke (n 3) 9 and P Birks, ‘Equity in the Modern Law’ (1996) 26 University of Western Australia Law Review 3, 21.

16 See eg Pickard v Sears (1837) 6 A & E 469, 112 ER 179.

17 See Devlin J in Eastern Distributors Ltd v Goldring [1957] 2 QB 600 (CA) 607–11.

18 See eg Low v Bouverie [1891] 3 Ch 82 (CA) 105, Greenwood v Martins Bank Ltd [1932] 1 KB 371 (CA) 379; [1933] AC 51 (HL) 59; Hopgood v Brown [1955] 1 WLR 213 (CA) 223.

19 (1837) 6 A & E 469, 474; 112 ER 179, 181.

20 (1854) 5 HL Cas 185, 10 ER 868.

21 [1947] KB 130 ( High Trees ).

22 ibid 134.

23 (1952) 15 Modern Law Review 1.

24 [1950] 1 KB 671 (CA). Note too that, in British Movietonews Ltd v London and District Cinemas Ltd [1951] 1 KB 190 (CA), Denning LJ (albeit without explicitly invoking equity) proposed a gloss on the doctrine of frustration: one that was rejected by the House of Lords on appeal: [1952] AC 166.

25 For the fate of that approach, see the discussion below at n 54.

26 Given the harm caused to the development of the law of unjust enrichment by the concept of ‘quasi-contract’, it is worth noting that an important influence in the application of the term ‘estoppel’ to the principle developed in High Trees was an article that referred to that principle as a ‘quasi-estoppel’: J Wilson, ‘Recent Developments in Estoppel’ (1951) 67 Law Quarterly Review 330.

27 See eg Dean v Bruce [1952] 1 KB 11 (CA) 14.

28 Gillett v Holt [2001] Ch 210 (CA).

29 Suggitt v Suggitt [2012] EWCA Civ 1140, [2012] WTLR 1607.

30 Henry v Henry [2010] UKPC 3, [2010] 1 All ER 988.

31 Ottey v Grundy [2003] EWCA Civ 1176, [2003] WTLR 1253.

32 Wayling v Jones (1993) 69 P & CR 170 (CA).

33 See eg Sullivan v Sullivan [2006] NSWCA 312, (2006) 13 BPR 24, 755; Delaforce v Simpson-Cook [2010] NSWCA 84, (2010) 78 NSWLR 483.

34 Chaudhary v Yavuz [2011] EWCA Civ 1314, [2011] 2 All ER 418.

35 Board of Management of All Saints Church of Ireland National School v Courts Service [2011] IEHC 274.

36 A meta-sixteen, perhaps?

37 Romeo and Juliet Act II, Scene 1, line 90 (Uliet J).

38 Cobbe (n 8).

39 For discussion of this question by the current author, see McFarlane (n 10).

40 Before: see eg Holiday Inns Inc v Broadhead (1974) 232 EG 951; Yaxley v Gotts [2000] Ch 162 (CA); Lloyd v Dugdale [2002] 2 P & CR 13 (CA) ; JT Developments Ltd v Quinn (1991) 62 P & CR 33 (CA); Sutcliffe v Lloyd [2007] EWCA Civ 153, [2007] 2 EGLR 13. After: see eg Herbert v Doyle [2010] EWCA Civ 1095, [2011] 1 EGLR 119; Whittaker v Kinnear [2011] EWHC 1479 (QB).

41 See B McFarlane, ‘Proprietary Estoppel and Failed Contractual Negotiations’ [2005] Conveyancer and Property Lawyer 501.

42 Cobbe (n 8) [14].

43 [1976] Ch 179 (CA).

44 Cobbe (n 8) [22].

45 Thorner (n 1) [20].

46 Cobbe (n 8) [28] and [37].

47 For criticism of the remedial constructive trust on this basis, see eg PJ Millett, ‘Restitution and Constructive Trusts’ (1998) 114 Law Quarterly Review 399, 399; P Birks, ‘The End of the Remedial Constructive Trust’ (1998) 12 Trust Law International 202.

48 Capron v Government of the Turks & Caicos Islands [2010] UKPC 2 [34].

49 See eg Hunt v Carew (1649) Nels 46, 21 ER 786; Dyer v Dyer (1682) 2 Ch Cas 108, 22 ER 869; Hunsden v Cheney (1690) 2 Vern 150, 23 ER 703. See further RP Meagher, JD Heydon and MJ Leeming, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies (4th edn, Butterworths Lexis Nexis 2002) para 17.015.

50 G Spencer Bower, The Law Relating to Estoppel by Representation (Butterworths, 1923).

51 R Megarry and P Baker (eds), Snell’s Equity (27 th edn, Sweet & Maxwell 1973) 561.

52 (1854) 5 HL Cas 185.

53 A Burrows, ‘We Do This at Common Law But That in Equity’ (2002) 22 Oxford Journal of Legal Studies 1.

54 This point was crucial to the Court of Appeal’s conclusion, in Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2003] QB 679 (CA) [157], that it is impossible to reconcile Solle v Butcher (n 24) with Bell v Lever Brothers Ltd [1932] AC 161 (HL). Contrary to Lord Denning MR’s analysis in Solle at 694, it could not be said that the differing views of the test for mutual mistake could be accommodated on the basis that Bell applied common law rules and Solle equitable principles.

55 F Scott Fitzgerald, The Crack-Up (1936) (Penguin 1965) 39. The essay continues: ‘One should, for example, be able to see that things are hopeless and yet be determined to make them otherwise.’

56 See eg B McFarlane and R Stevens, ‘The Nature of Equitable Property’ (2010) 4 Journal of Equity 1.

57 Note the analysis of CH Tham, ‘Notice of Assignment and Discharge by Performance’ [2010] Lloyd’s Maritime and Commercial Law Quarterly 38, 51: ‘The better analysis may rather be that the debtor only ever owes a duty (at common law) to the creditor; but, following the equitable assignment, the creditor is no longer in a position to exercise his strict legal rights vis-à-vis the debtor for his own benefit.’

58 See eg Roberts v Gill & Co [2010] UKSC 22, [2011] 1 AC 240 [62]–[71].

59 See further B McFarlane, The Structure of Property Law (Hart 2008) 212–14.

60 [2010] EWCA Civ 180, [2011] QB 86.

61 See eg Earl of Worcester v Finch (1600) 2 And 162, 123 ER 600; Lord Compton’s Case (1580) 2 Leon 211, 74 ER 485; Leigh & Sillavan Ltd v Aliakmon Shipping Co Ltd (The Aliakmon) [1986] AC 785 (HL); MCC Proceeds Inc v Lehman Bros [1998] 4 All ER 675 (CA).

62 See eg P Turner, ‘Consequential Loss and the Trust Beneficiary’ [2010] CLJ 445; K Low, ‘Equitable Title and Economic Loss’ (2010) 126 Law Quarterly Review 507; A Rushworth and A Scott, ‘Total Chaos?’ [2010] Lloyds Maritime and Commercial Law Quarterly 536; J Edelman, ‘Two Fundamental Questions for the Law of Trusts’ (2013) 129 Law Quarterly Review 66.

63 Shell (n 60) [132].

64 As noted by Edelman (n 62) 69–75.

65 Collier v P & MJ Wright (Holdings) Ltd [2007] EWCA Civ 1329, [2008] 1 WLR 643 [42] (Arden LJ).

66 [1947] KB 130.

67 ibid 134.

68 Peel (n 2). See eg Hickman v Haynes (1875) LR 10 CP 598.

69 See eg S Wilken and K Ghaly, The Law of Waiver, Variation and Estoppel (3 rd edn, OUP 2012) para 4.30.

70 Bottiglieri di Navigazione SpA v Cosco Qingdao Ocean Shipping Co [2005] EWHC 244 (Comm), [2005] 2 Lloyds Rep 1.

71 (1884) LR 9 App Cas 605.

72 D & C Builders Ltd v Rees [1966] 2 QB 617 (CA) 624.

73 See Sixth Interim Report of the Law Revision Committee (Cmd 5449, 1945) [20]–[21].

74 See F Reynolds and G Treitel, ‘Consideration for the Modification of Contracts’ (1965) 7 Malaya Law Review 1, 6–7, noting that A had not intended to release B from his duty to pay interest on the sum due, and so had not in fact consented to the discharge of B’s duty to pay interest; see too G Treitel, Landmarks of Twentieth Century Contract Law (OUP 2003) 25.

75 Compare the treatment of Bell v Lever Brothers Ltd (n 54) in Solle v Butcher (n 24); and note the ultimate rejection of that treatment in Great Peace (n 54).

76 (1877) 2 App Cas 439 (HL).

79 For more recent applications of the principle, see eg Hazel v Akhtar [2001] EWCA Civ 1883, [2002] 07 EG 124; Scinto v Newham LBC [2009] EWCA Civ 837.

80 B had written to A proposing to defer the repairs, and A had agreed to that proposal: Hughes (n 76) 444–45.

81 See eg (1877) 2 App Cas 439, 448 (Lord Cairns LC) and 452 (Lord Blackburn).

82 See eg (1876) 1 CPD 120, 134 (James LJ): ‘It is clearly against equity and good conscience that under these circumstances, [A] should take advantage of the forfeiture’; and (1877) 2 App Cas 439, 449 (Lord O’Hagan): ‘if [B was] misled by [A’s conduct] into the belief that [A’s] strict legal right was abandoned or suspended for the time, [A] cannot be allowed to take advantage of the forfeiture which was so accomplished’.

83 This point is emphasized by D Gordon, ‘Creditors’ Promises to Forgo Rights’ [1963] Cambridge Law Journal 222. Note too Owen Sound Public Library Board v Mial Developments Ltd (1979) 102 DLR (3d) 685 (Ontario Court of Appeal) where the principle was applied to ensure that A could not ‘take advantage of a default induced by its own conduct’.

84 An analogy can be drawn with the so-called ‘ Pallant v Morgan ’ equity (named for the case: [1953] Ch 43). If A acquires a right from X, having agreed with B that the right will be held for the benefit of both A and B then, if B’s action in reliance on that agreement led to A’s gaining an advantage in relation to the acquisition of the right, the agreement may be enforced, even if it is not contractually binding. Note that the principle applies even if B’s action did not involve a detriment to B: in Pallant itself, for example, B simply failed to bid in an auction where B, in any case, would not have outbid A. B’s dropping out, however, led to A’s gaining of an advantage, as A acquired the property more cheaply. A was therefore prevented from acting inconsistently with A and B’s agreement. For discussion of the ‘ Pallant v Morgan ’ equity, and other areas of law based on the same principle, see B McFarlane, ‘Constructive Trusts Arising on a Receipt of Property Sub Conditione ’ (2004) 120 Law Quarterly Review 667.

85 See eg Birmingham & District Land Co v London and North Western Railway Co (1888) 40 Ch D 268 (CA), where Cotton LJ noted that there had been no new agreement between A and B; A was nonetheless prevented from exercising a contractual power to terminate B’s lease as a result of B’s failure to build, as A had led B to believe that the time in which B had to build would be extended whilst the parties waited to see the scope of a planned railway scheme. Bowen LJ’s statement of principle in that case applies if A induces B to believe that A’s right will not be enforced or will be kept in suspense, and thus does not require a promise by A: ibid 286.

86 Note that A’s past conduct in failing to assert a right arising from particular conduct of B will not, by itself, be enough to count as encouragement to B that the right will not be enforced if B acts in the same way in the future: as Viscount Simonds noted in Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd [1955] 1 WLR 761 (HL) 764: ‘I would not have it supposed, particularly in commercial transactions, that mere acts of indulgence are apt to create rights.’ See too the decision of the Supreme Court of Canada in John Burrows Ltd v Subsurface Surveys Ltd [1968] SCR 607, (1968) 68 DLR (2d) 354.

87 See eg Craven-Ellis v Canons Ltd [1936] 2 KB 403, 411–12, where Greer LJ stated that the success of a quantum meruit claim arising where work is performed under a void contract does not depend on the finding of a promise by A to pay B a reasonable sum for the work done.

88 See eg Hickman v Haynes (1875) LR 10 CP 598. Note that there is no binding variation of the initial contract, as B is not regarded as having provided any consideration for A’s promise to accept later performance.

89 For the recognition of such a liberty in a case where B was viewed by the court (albeit incorrectly) as a trespasser, see Wood v Leadbitter (1845) 13 M & W 838, 153 ER 351.

90 See eg Minister of Health v Bellotti [1944] 1 KB 298, 305-306; J Hill, ‘The Termination of Bare Licences’ [2001] Cambridge Law Journal 89.

91 It is, for example, closely echoed in the tests set out by H Beale (gen ed), Chitty on Contracts , vol 1 (31 st edn, Sweet & Maxwell 2012) 3-086 and by J McGhee (gen ed), Snell’s Equity (32 nd edn, Sweet & Maxwell 2010) 370–71. See too Neuberger LJ in Steria (n 3) [93]; Morgan J in Crossco No 4 Unlimited v Jolan Ltd [2011] EWHC 803 (Ch), [2012] 1 P & CR 16 [332].

92 [1979] 1 WLR 783, 810.

93 It is true that, in High Trees itself, the bar on A’s claiming rent at the contractual rate was only temporary. That was a result, however, of the terms of A’s promise, not of the need to allow B to re-arrange its affairs so as to pay the contractual rent.

94 See eg Ajayi v RT Briscoe (Nigeria) Ltd [1964] 1 WLR 1326 (PC) 1331; Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd [1954] 1 WLR 862 (HL); Brikom Investments Ltd v Seaford [1981] 1 WLR 863 (CA).

95 Denning (n 23) 1–3.

96 [1951] 2 KB 215 (CA) 220.

97 See Lord Denning MR in Crabb v Arun District Council [1976] Ch 179 (CA) 187–88.

98 In the USA, see eg Restatement (Second) of Contracts s 90 (1981); Hoffman v Red Owl Stores 133 NW 2d 267 (1965); Elvin Associates v Franklin 735 F Supp 1177 (1990); Cyberchron Corp v Calldata Systems Development 47 F 3d 39 (1995). In Australia, see eg Waltons Stores (n 4); Leading Edge Events Australia Pty Ltd v Kiri Te Kanawa [2007] NSWSC 288; ACN 074971109 Pty Ltd (as Trustee for the Argot Unit Trust) v The National Mutual Life Association of Australasia [2008] VSCA 247, (2008) 21 VR 351.

99 Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741 (HL) 757.

100 See eg Wilken and Ghaly (n 69) para 8.49, noting that ‘clarification from the Supreme Court may be needed’ to resolve the current uncertainty on this point.

101 [2007] EWCA Civ 1329, [2008] 1 WLR 643.

102 K Handley, Estoppel by Conduct and Election (Sweet & Maxwell 2006) para 11-004 identifies Chalmers v Pardoe [1963] 1 WLR 677 (PC) as having brought to wider attention the principle that Handley (following eg Spencer Bower (n 50) (3 rd edn, 1977, Ch XII) refers to as ‘estoppel by encouragement’. It is worth noting that, as late as 1986, proprietary estoppel was still equated with the acquiescence principle and so seen as incapable of applying if the criteria for the application of that principle were not met: see Coombes v Smith [1986] 1 WLR 808, 817.

103 (1862) 3 Giff 592, 66 ER 544.

104 For full discussion of that doctrine, and its demise, see F Dawson, ‘Making Representations Good’ (1982) 1 Canterbury Law Review 329; P Finn, ‘Equitable Estoppel’ in P Finn (ed), Essays in Equity (Law Book Company Ltd 1985). Note too P Matthews, ‘The Words Which Are Not There: A Partial History of the Constructive Trust’ in C Mitchell (ed), Constructive and Resulting Trusts (Hart 2009) 25–44.

105 (1862) 3 Giff 592, 603, referring to Pickard v Sears (n 16).

106 Jorden (n 20).

107 Pickard (n 16) 604, referring to Hammersley v De Biel (1845) 12 Cl & F 45, 8 ER 1312.

108 (1883) 8 App Cas 467 (HL).

109 ibid 473.

110 See Finn (n 104) 64–5.

111 For modern near-equivalents see eg Jennings v Rice [2002] EWCA Civ 159, [2003] 1 P & CR 8 and Campbell v Griffin [2001] EWCA Civ 990, [2001] WTLR 981.

112 Thorner (n 1).

113 Jorden (n 20).

114 It was relied on, for example, by each of Lord Walker (at [56]–[57] and [62]) and Lord Neuberger (at [101]) in their speeches in Thorner (n 1).

115 Unrep, 14 April 1994 (CA).

116 ibid 4.

118 [2007] EWCA Civ 153, [2007] 2 EGLR 13.

119 ibid [38].

121 Thorner (n 1) [8]. See R Knox (tr), Hegel’s Philosophy of Right (OUP 1967) Preface.

122 Lord Neuberger of Abbotsbury (n 3) 544–45; see too Thorner (n 1) [101].

123 The wording here is deliberate: before any such court order, A is best described as having a liability (not a duty). Compare the analysis of unjust enrichment claims by S Smith, ‘The Restatement of Liabilities in Restitution’ in C Mitchell and W Swadling (eds), The Restatement Third: Restitution and Unjust Enrichment – Critical and Comparative Essays (Hart 2013) 227.

124 See eg Sledmore v Dalby [1996] 72 P & CR 196 (CA); Jennings (n 111) [51]; Henry v Henry [2010] UKPC 3, [2010] 1 All ER 988.

125 See eg Ottey v Grundy (n 31); Powell v Benny [2007] EWCA Civ 1283.

126 See eg the influential formulations of Lord Denning MR in Inwards v Baker [1965] 2 QB 29 (CA) 36–37 and of Oliver J in Taylors Fashions Ltd v Liverpool Trustees Co Ltd [1982] 1 QB 133, 151–52. Handley (n 102) para 11-001 divides cases of proprietary estoppel into categories of ‘estoppel by standing by’ and ‘estoppel by encouragement’, and has adopted that terminology judicially: see eg Delaforce v Simpson-Cook (n 33) [21].

127 (1976) Ch 179 (CA) 188.

128 (1888) 40 Ch D 268 (CA) 277.

129 In Cobbe (n 8), Lord Walker at [79] described Crabb as a ‘difficult case’. The difficulty can be seen as arising from the fact that it was far from clear that A could be said to have made an express or implied promise to B. The explanation of Crabb given by Lord Scott in Cobbe was considered, and dismissed, above: text at n 44.

130 See J Mee, ‘The Limits of Proprietary Estoppel: Thorner v Major ’ (2009) 21 Child and Family Law Quarterly 367, 370–72.

131 Cobbe (n 8).

132 [2007] EWHC 2422 (Ch) [19] and [136].

133 [2008] EWCA Civ 732, [55].

134 Thorner (n 1) [3], [60], [74] and [77].

135 Lord Neuberger in Fisher v Brooker [2009] 1 UKHL 41, [2009] 1 WLR 1764 [62].

136 See eg The Earl of Oxford’s Case (1615) Chan Rep 1, 21 ER 485.

137 See eg Dann v Spurrier (1802) 7 Ves 231, 235–36; 32 ER 94, 95–96.

138 (1866) LR 1 HL 129, 140–41.

139 Thorner (n 1) [55].

140 See too the formulations of Lord Wensleydale in Ramsden v Dyson (1866) LR 1 HL 129, 168 and of Fry J in Wilmott v Barber (1880) 15 Ch D 96 (Ch) 105–6. See too Lord Scott in Blue Haven Enterprises v Tully [2006] UKPC 17 [24], discussed by B McFarlane, ‘ Blue Haven Enterprises v Tully ’ (2006) 1 Journal of Equity 156.

141 Fisher (n 135).

142 (1880) 15 Ch D 96 (Ch) 105–06.

143 See eg Sir Arthur Hobhouse in Plimmer v Mayor, Councillors and Citizens of the City of Wellington (1884) 9 App Cas 699 (PC) 711: ‘there was no disagreement among the judges on the principles of law laid down in [ Ramsden v Dyson ]’; Oliver J in Taylors Fashions v Liverpool Trustees Co Ltd (n 126) 144: ‘Lord Kingsdown dissented on the facts. There was no – or certainly no overt – disagreement between their Lordships as to the applicable principle’; Cumming Bruce LJ in Pascoe v Turner [1979] 1 WLR 431 (CA) 436: ‘the dissent of Lord Kingsdown was upon the inferences to be drawn from the facts’; Lord Walker in Cobbe (n 8) [52]: ‘The difference of opinion was over an issue of fact.’

144 (1866) LR 1 HL 129, 170.

145 Mee (n 7) 184–86. See too K Low, ‘Non-feasance in Equity’ (2012) 128 Law Quarterly Review 63, 71.

146 Lord Kingsdown in Ramsden (n 138) 170: ‘having submitted, in writing, very fully to your Lordships the grounds of my opinion, without any success, it is unnecessary, and I think it would not be useful, that I should do more on the present occasion than state in a very few words what I understand to be the law upon the subject’; Fermat’s marginal note in his father’s copy of Diophantus’s Arithmetica , containing Fermat’s ‘Last Theorem’: ‘I have discovered a truly remarkable proof which this margin is too narrow to contain.’

147 For a very helpful discussion of the background to Lord Kingsdown’s principle, see Matthews (n 104) 25–44.

148 See Mee (n 7) 179–81 and Mee (n 130) 372–74.

149 Cobbe (n 8) [14], [28], and [66].

150 (1880) 15 Ch D 96 (Ch) 105.

151 See eg Lord Cranworth in Ramsden (n 138) 140–41 and Lord Wensleydale, ibid 168.

152 If that were the case, for example, the acquiescence principle would have applied in Cobbe (n 8), as A had knowingly failed to disabuse B of his belief that, if planning permission were obtained, A would enter into a contract with B on the terms previously agreed. Suggestions that the acquiescence principle can apply where B’s belief is as to his future rights (such as that of Mummery LJ in Scottish Newcastle plc v Lancashire Mortgage Corporation Ltd [2007] EWCA Civ 684 [44]) should therefore be dismissed, as based on a confounding of Principle 3 and Principle 4.

153 See text from n 130.

154 See eg the influential formulations of Lord Denning MR in Inwards (n 126) 36–37 and of Oliver J in Taylors Fashions (n 126) 151–52.

155 (1853) 17 Beav 60, 74–75; 51 ER 954, 960. Note his similar formulation in Rochdale Canal Company v King (1853) 16 Beav 630, 633–34; 51 ER 924, 925.

156 See eg S Bright and B McFarlane, ‘Proprietary Estoppel and Property Rights’ [2005] Cambridge Law Journal 449 ; A Robertson, ‘The Reliance Basis of Proprietary Estoppel Remedies’ [2008] Conveyancer and Property Lawyer 295; J Mee, ‘The Role of Expectation in the Determination of Proprietary Estoppel Remedies’ in M Dixon (ed), Modern Studies in Property Law, vol 5 (Hart 2009).

157 (1884) 9 App Cas 699 (PC).

158 ibid 714.

159 Beaufort (n 155); Unity Joint Stock Mutual Banking Association v King (1858) 25 Beav 72, 53 ER 563 was also cited.

160 See B McFarlane, ‘Proprietary Estoppel and Third Parties after the Land Registration Act 2002’ [2003] Cambridge Law Journal 661.

161 See eg Jennings (n 111); Ottey v Grundy (n 31); Henry (n 124).

162 Cobbe (n 8) [14].

163 [1955] 1 WLR 213 (CA).

164 ibid 223.

166 Cobbe (n 8) [14].

167 ibid [66].

168 Thorner (n 1).

169 Taylors Fashions (n 126) 151–52.

170 K Gray and SF Gray, Elements of Land Law (5 th edn, OUP 2009) 1209.

171 Oliver J’s judgment considers two claims: the first, made by Taylors Fashions, failed; the second, made by Old & Campbell (‘Olds’) succeeded.

172 [1982] QB 133, 158. See too the view of Lord Scott (who had been counsel for Taylors Fashions) in Cobbe (n 8) [18].

173 There is some evidence that, in English law, the principle can already operate in such a case: see eg Brewer Street Investments Ltd v Barclays Woollen Co Ltd [1954] 1 QB 428 (CA) and Easat Antennas Ltd v Racal Defence Electronics Ltd (unrep, Ch, 21 June 2000, Hart J), discussed in see McFarlane (n 10) 103–04. Note too Nolan (n 10).

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Legal and equitable assignments

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Financiers and lessors often take an assignment over debts or certain rights under contracts as part of their security package. Depending on how this is done, an assignment can either be characterised as a legal or equitable assignment under English law. Stephenson Harwood’s Dipesh Bharania explains

A key difference between a legal and equitable assignment is the ability of the assignee, be it a financier or lessor, to bring proceedings in its own name against the debtor for payment of the debt owed, or to enforce rights in the contract.

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A legal assignee has this right, but there is a question over whether an equitable assignee has this right or not.

In the case of General Nutrition Investment Company v Holland and Barrett International Ltd and another [2017] EWHC 746 Ch, the High Court held that the beneficiary of an equitable assignment did not have the right to bring proceedings in its own name, and had to do so jointly with the assignor which had assigned rights in the underlying contract.

This raises questions about the equitable assignment, as it appears to contradict other judgments which permit an equitable assignee to take proceedings in its own name. The predecessor company of General Nutrition Investment Company (GNIC) entered into a trade mark licence agreement in March 2003 with Holland and Barrett (H&B) allowing H&B to use certain trademarks in the UK.

After complex internal restructuring, the original contracting party had been dissolved and GNIC was the successor company, which as assignee had been assigned both the rights under the original trademark licence agreement, and the rights to the trademarks themselves. GNIC alleged that H&B was in breach of the licence agreement and served a number of notices of termination on H&B purporting to terminate the agreement.

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The court had to decide whether any of these notices of termination were effective, and whether GNIC had the right to serve such notices, and bring and maintain proceedings against H&B in its own name.

The formalities for a legal assignment are set out in Section 136 of the Law of Property Act 1925, including that the assignment must be:

In writing and executed by the assignor “Absolute” and unconditional, Not be expressed to be “by way of charge”, and Notified in writing to the person against whom the assignor could enforce the assigned rights – usually the other contracting party.

It can often suit the assignor, the assignee and the third party to allow the assignor to deal with the third party, for notice not to be given (certainly initially) and the assignee to remain a silent party. This method is frequently used in financing documents, with notice only being given at a later date (rather than at the time of assignment) when there is a possibility of enforcement on the horizon.

An equitable assignment tends to be created when an assignment does not meet one or more of the requirements for a legal assignment. The main differences between a legal and an equitable assignment are priority (and the established principle that the assignee who serves notice first takes priority over any other assignee (where notice is not given)) and an equitable assignee needing to join the assignor as a party in any legal proceedings it brings against the third-party debtor.

However, two recent cases have lessened the distinction in practice between the two. In the Bexhill case the Court of Appeal recognised that an equitable assignee could take action in its own name without joining in the assignor. In the Ardila case, where notice had been given to the contracting party, the High Court looked at the terms of the notice and decided that what had seemed to be a legal assignment was in fact an equitable assignment because the wording of the notice seemed to retain rights for the assignor. The court used this reasoning to declare it an equitable assignment, despite the notice having been given as required.

Returning to the case in point, after the internal reorganisation and subsequent assignment of the trade mark licence agreement to GNIC, no notices of such assignment were served on H&B by the assignor prior to the purported termination of the agreement or the issue of proceedings. GNIC maintained that as it took the place of its predecessor as the “Licensor”, it became the body entitled to exercise rights of termination under the agreement. H&B’s contention was that, as an equitable assignee, GNIC did not have the right to terminate the agreement or bring proceedings in its own name.

It is widely accepted that, until a notice of assignment is given, and (i) the third party can validly discharge its obligations under the contract to the assignor, and (ii) the third party may raise against the assignee any defence or set-off which he could have raised against the assignor (provided that the matter on which the defence is based arose before notice was received) and the contracting party and assignor can amend the terms of the contract without the assignee’s consent.

The High Court considered that previous case law on this issue was binding as it had not been overruled or materially distinguished in any subsequent cases heard, and held that notice to the contracting third party is necessary to perfect the right of the assignee. Additional weight was given to the fact that a substantive contractual right (in this case, the right to terminate the licence agreement) had been assigned rather than just the assignment of a debt. Consequently, the contractual relationship between the parties was seeking to be amended and therefore the third party was entitled to see that such change was being effected by a party which had the right to do so and whom it knew to have such rights. The Court maintained that H&B cannot be expected to accept a notice of termination from an entity which turns out to be an assignee when it had never been given notice of that assignment.

While the High Court accepted that this decision may be appealed, this has raised a question about equitable assignments and the rights of the equitable assignee under English law. In the meantime, in practice, parties will have to scrutinise what type of right they are seeking, whether in security or as a full legal assignment and opt for the method which provides the clearest outcome possible as the law stands when they take the assignment. Anyone taking an assignment of the benefit of a contract should clearly ensure that notice is served on the other contracting party if it wants to be sure it can act in its own name under that contract against the other contracting party if need be.

Otherwise, there is a risk that an equitable assignee will be unable to enforce substantive contractual rights without having to join in the assignor in proceedings. That said, it may still be commercially preferable to have an equitable assignment for particular financing and leasing structures where it is not thought difficult to join the assignor at a later date if need be. In this case it was not possible, as the assignor had been dissolved. Advice should be sought about the type of assignment to be taken in each transaction pending further clarification from the courts.

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Statutory Assignment vs Equitable Assignment

This article attempts to provide a brief overview of the differences between statutory assignment and equitable assignment. The actual application of the general rules described here would be subject to the applicable distinct facts and circumstances.

What is Assignment?

An assignment is a transfer of rights or liabilities such as those that arise under an instrument, chose in action 1 , or debt. An assignment can either be a statutory assignment or an equitable assignment.

In Malaysia, an assignment complying with Section 4(3) of the Civil Law Act 1956 was described as a ‘statutory assignment’ and an assignment not complying with Section 4(3) of the Civil Law Act 1956 was a ‘non-statutory assignment’ i.e., an equitable assignment. 2 The conditions of a statutory assignment are as follows: 3

(a) it must be absolute and did not purport to be by way of charge only;

(b) the assignment was in writing under the hand of the assignor; and

(c) express notice in writing thereof had been given to the debtor or trustee.

Meanwhile, an equitable assignment gives the assignee a right enforceable only in equity. The mode or form of assignment is absolutely immaterial provided the intention of the parties is clear. 4

Rules that Govern Assignments

Written notice is an essential part of a statutory assignment. Therefore, it is ineffective unless strictly accurate – accurate, for instance, as regards the date of the assignment and the amount due from the debtor. 5

However, notice is not necessary to perfect an equitable assignment. Even without notice to the debtor the title to the assignee is complete, not only against the assignor personally, but also against the persons who stand in the same position as the assignor, as, for instance, his trustee in bankruptcy, a judgement creditor or a person claiming under a later assignment made without consideration. 6

In regard to the form of notice, as mentioned earlier, a statutory assignment must comply with the form of notice required under Section 4(3) of the Civil Law Act 1956, whilst for an equitable assignment, no particular form is required to constitute a valid equitable assignment.

Additionally, it must be noted that although notice is not required for equitable assignments, an assignee must give notice to the debtor in order to get priority over other assignee(s). In this regard, the Federal Court in Public Finance Bhd v Scotch Leasing Sdn Bhd (In Receivership) (Perwira Habib Bank Malaysia, Intervener) [1996] 2 MLJ 369 explained in detail about the importance of notice:

“ We need to say a few words more about the great desirability of giving notice of assignment of a debt by an assignee to the debtor, even though absence of such notice does not affect the validity of the equitable assignment as between the assignor and the assignee. If notice is not given, the assignee must give credit for any payment made to the assignor by the debtor. This rule means that, by extension, even if the assignor assigns once more the debt to another person in fraud or otherwise on the earlier assignee, and that other person gives notice to the debtor; and if the debtor pays that other person or the second assignee, then the earlier assignee must still give credit to the debtor for his payment thus, for the debtor cannot be blamed for doing lawfully in ignorance of the title of the earlier assignee who has failed to give notice of the assignment to the debtor. Notice to debtor is for the protection of the assignee himself. It is this effect of what the debtor does lawfully as described that dims the view of the true role of the nemo dat rule in the resolution of disputed claims to a same debt. The money paid to the ‘second assignee’ can, of course, be recovered by the earlier assignee on the nemo dat principle. ”

(b) An assignee takes subject to equities

For both statutory assignment and equitable assignment, the assignee takes ‘subject to equities’, that is, subject to all such defences as might have prevailed against the assignor.

The general rule, both at law and in equity, is that no person can acquire title to a chose in action…from one who has himself no title to it. 7 In other words, the assignee can be in a no better position than the assignor was prior to the assignment. 8

(c) Rights incapable of assignment

Some choses in action are not assignable, and not every right which arises under or out of a contract can be assigned. 9 An example of rights incapable of assignment is where the nature of the contract is intended to be personal, therefore, it will be meaningless if it is assigned to another person.

Effect of Assignment

A statutory assignment has the sole intended effect of facilitating an assignee to sue in his own name directly irrespective of whether the chose in action is an equitable chose in action or a legal chose in action. 10

Meanwhile, the effect of an equitable assignment depends on whether the assignment is absolute or not. An absolute assignment of an equitable chose in action entitles the assignee to bring an action in his own name. 11 But a non-absolute assignment of an equitable chose in action does not entitle the assignee to sue in his own name but requires him to join the assignor as a party. 12

• ‘Chose in action’ is a known legal expression used to describe all personal rights of property which can only be claimed or enforced by action, and not by taking physical possession (Associated Tractors Sdn Bhd v Woo Sai Wa [1997] 5 MLJ 441 (High Court)).
• MBF Factors Sdn Bhd v Tay Hing Ju (T/A New General Trading) [2002] 5 MLJ 536 (High Court).
• Williams Brandt Sons & Co v Dunlop Rubber Co [1905] AC 454 (House of Lords).
• Leong, A. P. B. (1998). Cheshire, Fifoot and Furmston’s Law of Contract (2nd ed.). Butterworths Asia, at page 861.
• Guest, A. G. (1984). Anson’s law of contract, at page 400.
• Meagher, R. P., Heydon, J. D., & Leeming, M. J. (2022). Meagher, Gummow and Lehane’s Equity Doctrine and Remedies (4th ed., p. 284). Butterworths LexisNexis.
• Guest, A. G. (1984). Anson’s law of contract, at page 402.
• Lim Chon Jet @ Lim Chon Jat & Ors v Wee Ai Hua & Anor [2022] 6 MLJ 243 (Court of Appeal).

Written by:

Nur Izzatie Azlan & Narina Aireen Hilmy Zaini  ( [email protected] )

Corporate Communications Azmi & Associates 28 November 2023

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• assignments basic law

Assignments: The Basic Law

The assignment of a right or obligation is a common contractual event under the law and the right to assign (or prohibition against assignments) is found in the majority of agreements, leases and business structural documents created in the United States.

As with many terms commonly used, people are familiar with the term but often are not aware or fully aware of what the terms entail. The concept of assignment of rights and obligations is one of those simple concepts with wide ranging ramifications in the contractual and business context and the law imposes severe restrictions on the validity and effect of assignment in many instances. Clear contractual provisions concerning assignments and rights should be in every document and structure created and this article will outline why such drafting is essential for the creation of appropriate and effective contracts and structures.

The reader should first read the article on Limited Liability Entities in the United States and Contracts since the information in those articles will be assumed in this article.

Basic Definitions and Concepts:

An assignment is the transfer of rights held by one party called the “assignor” to another party called the “assignee.” The legal nature of the assignment and the contractual terms of the agreement between the parties determines some additional rights and liabilities that accompany the assignment. The assignment of rights under a contract usually completely transfers the rights to the assignee to receive the benefits accruing under the contract. Ordinarily, the term assignment is limited to the transfer of rights that are intangible, like contractual rights and rights connected with property. Merchants Service Co. v. Small Claims Court , 35 Cal. 2d 109, 113-114 (Cal. 1950).

An assignment will generally be permitted under the law unless there is an express prohibition against assignment in the underlying contract or lease. Where assignments are permitted, the assignor need not consult the other party to the contract but may merely assign the rights at that time. However, an assignment cannot have any adverse effect on the duties of the other party to the contract, nor can it diminish the chance of the other party receiving complete performance. The assignor normally remains liable unless there is an agreement to the contrary by the other party to the contract.

The effect of a valid assignment is to remove privity between the assignor and the obligor and create privity between the obligor and the assignee. Privity is usually defined as a direct and immediate contractual relationship. See Merchants case above.

Further, for the assignment to be effective in most jurisdictions, it must occur in the present. One does not normally assign a future right; the assignment vests immediate rights and obligations.

No specific language is required to create an assignment so long as the assignor makes clear his/her intent to assign identified contractual rights to the assignee. Since expensive litigation can erupt from ambiguous or vague language, obtaining the correct verbiage is vital. An agreement must manifest the intent to transfer rights and can either be oral or in writing and the rights assigned must be certain.

Note that an assignment of an interest is the transfer of some identifiable property, claim, or right from the assignor to the assignee. The assignment operates to transfer to the assignee all of the rights, title, or interest of the assignor in the thing assigned. A transfer of all rights, title, and interests conveys everything that the assignor owned in the thing assigned and the assignee stands in the shoes of the assignor. Knott v. McDonald’s Corp ., 985 F. Supp. 1222 (N.D. Cal. 1997)

The parties must intend to effectuate an assignment at the time of the transfer, although no particular language or procedure is necessary. As long ago as the case of National Reserve Co. v. Metropolitan Trust Co ., 17 Cal. 2d 827 (Cal. 1941), the court held that in determining what rights or interests pass under an assignment, the intention of the parties as manifested in the instrument is controlling.

The intent of the parties to an assignment is a question of fact to be derived not only from the instrument executed by the parties but also from the surrounding circumstances. When there is no writing to evidence the intention to transfer some identifiable property, claim, or right, it is necessary to scrutinize the surrounding circumstances and parties’ acts to ascertain their intentions. Strosberg v. Brauvin Realty Servs., 295 Ill. App. 3d 17 (Ill. App. Ct. 1st Dist. 1998)

The general rule applicable to assignments of choses in action is that an assignment, unless there is a contract to the contrary, carries with it all securities held by the assignor as collateral to the claim and all rights incidental thereto and vests in the assignee the equitable title to such collateral securities and incidental rights. An unqualified assignment of a contract or chose in action, however, with no indication of the intent of the parties, vests in the assignee the assigned contract or chose and all rights and remedies incidental thereto.

More examples: In Strosberg v. Brauvin Realty Servs ., 295 Ill. App. 3d 17 (Ill. App. Ct. 1st Dist. 1998), the court held that the assignee of a party to a subordination agreement is entitled to the benefits and is subject to the burdens of the agreement. In Florida E. C. R. Co. v. Eno , 99 Fla. 887 (Fla. 1930), the court held that the mere assignment of all sums due in and of itself creates no different or other liability of the owner to the assignee than that which existed from the owner to the assignor.

And note that even though an assignment vests in the assignee all rights, remedies, and contingent benefits which are incidental to the thing assigned, those which are personal to the assignor and for his sole benefit are not assigned. Rasp v. Hidden Valley Lake, Inc ., 519 N.E.2d 153, 158 (Ind. Ct. App. 1988). Thus, if the underlying agreement provides that a service can only be provided to X, X cannot assign that right to Y.

Novation Compared to Assignment:

Although the difference between a novation and an assignment may appear narrow, it is an essential one. “Novation is a act whereby one party transfers all its obligations and benefits under a contract to a third party.” In a novation, a third party successfully substitutes the original party as a party to the contract. “When a contract is novated, the other contracting party must be left in the same position he was in prior to the novation being made.”

A sublease is the transfer when a tenant retains some right of reentry onto the leased premises. However, if the tenant transfers the entire leasehold estate, retaining no right of reentry or other reversionary interest, then the transfer is an assignment. The assignor is normally also removed from liability to the landlord only if the landlord consents or allowed that right in the lease. In a sublease, the original tenant is not released from the obligations of the original lease.

Equitable Assignments:

An equitable assignment is one in which one has a future interest and is not valid at law but valid in a court of equity. In National Bank of Republic v. United Sec. Life Ins. & Trust Co. , 17 App. D.C. 112 (D.C. Cir. 1900), the court held that to constitute an equitable assignment of a chose in action, the following has to occur generally: anything said written or done, in pursuance of an agreement and for valuable consideration, or in consideration of an antecedent debt, to place a chose in action or fund out of the control of the owner, and appropriate it to or in favor of another person, amounts to an equitable assignment. Thus, an agreement, between a debtor and a creditor, that the debt shall be paid out of a specific fund going to the debtor may operate as an equitable assignment.

In Egyptian Navigation Co. v. Baker Invs. Corp. , 2008 U.S. Dist. LEXIS 30804 (S.D.N.Y. Apr. 14, 2008), the court stated that an equitable assignment occurs under English law when an assignor, with an intent to transfer his/her right to a chose in action, informs the assignee about the right so transferred.

An executory agreement or a declaration of trust are also equitable assignments if unenforceable as assignments by a court of law but enforceable by a court of equity exercising sound discretion according to the circumstances of the case. Since California combines courts of equity and courts of law, the same court would hear arguments as to whether an equitable assignment had occurred. Quite often, such relief is granted to avoid fraud or unjust enrichment.

Note that obtaining an assignment through fraudulent means invalidates the assignment. Fraud destroys the validity of everything into which it enters. It vitiates the most solemn contracts, documents, and even judgments. Walker v. Rich , 79 Cal. App. 139 (Cal. App. 1926). If an assignment is made with the fraudulent intent to delay, hinder, and defraud creditors, then it is void as fraudulent in fact. See our article on Transfers to Defraud Creditors .

But note that the motives that prompted an assignor to make the transfer will be considered as immaterial and will constitute no defense to an action by the assignee, if an assignment is considered as valid in all other respects.

Enforceability of Assignments:

Whether a right under a contract is capable of being transferred is determined by the law of the place where the contract was entered into. The validity and effect of an assignment is determined by the law of the place of assignment. The validity of an assignment of a contractual right is governed by the law of the state with the most significant relationship to the assignment and the parties.

In some jurisdictions, the traditional conflict of laws rules governing assignments has been rejected and the law of the place having the most significant contacts with the assignment applies. In Downs v. American Mut. Liability Ins. Co ., 14 N.Y.2d 266 (N.Y. 1964), a wife and her husband separated and the wife obtained a judgment of separation from the husband in New York. The judgment required the husband to pay a certain yearly sum to the wife. The husband assigned 50 percent of his future salary, wages, and earnings to the wife. The agreement authorized the employer to make such payments to the wife.

After the husband moved from New York, the wife learned that he was employed by an employer in Massachusetts. She sent the proper notice and demanded payment under the agreement. The employer refused and the wife brought an action for enforcement. The court observed that Massachusetts did not prohibit assignment of the husband’s wages. Moreover, Massachusetts law was not controlling because New York had the most significant relationship with the assignment. Therefore, the court ruled in favor of the wife.

Therefore, the validity of an assignment is determined by looking to the law of the forum with the most significant relationship to the assignment itself. To determine the applicable law of assignments, the court must look to the law of the state which is most significantly related to the principal issue before it.

Assignment of Contractual Rights:

Generally, the law allows the assignment of a contractual right unless the substitution of rights would materially change the duty of the obligor, materially increase the burden or risk imposed on the obligor by the contract, materially impair the chance of obtaining return performance, or materially reduce the value of the performance to the obligor. Restat 2d of Contracts, § 317(2)(a). This presumes that the underlying agreement is silent on the right to assign.

If the contract specifically precludes assignment, the contractual right is not assignable. Whether a contract is assignable is a matter of contractual intent and one must look to the language used by the parties to discern that intent.

In the absence of an express provision to the contrary, the rights and duties under a bilateral executory contract that does not involve personal skill, trust, or confidence may be assigned without the consent of the other party. But note that an assignment is invalid if it would materially alter the other party’s duties and responsibilities. Once an assignment is effective, the assignee stands in the shoes of the assignor and assumes all of assignor’s rights. Hence, after a valid assignment, the assignor’s right to performance is extinguished, transferred to assignee, and the assignee possesses the same rights, benefits, and remedies assignor once possessed. Robert Lamb Hart Planners & Architects v. Evergreen, Ltd. , 787 F. Supp. 753 (S.D. Ohio 1992).

On the other hand, an assignee’s right against the obligor is subject to “all of the limitations of the assignor’s right, all defenses thereto, and all set-offs and counterclaims which would have been available against the assignor had there been no assignment, provided that these defenses and set-offs are based on facts existing at the time of the assignment.” See Robert Lamb , case, above.

The power of the contract to restrict assignment is broad. Usually, contractual provisions that restrict assignment of the contract without the consent of the obligor are valid and enforceable, even when there is statutory authorization for the assignment. The restriction of the power to assign is often ineffective unless the restriction is expressly and precisely stated. Anti-assignment clauses are effective only if they contain clear, unambiguous language of prohibition. Anti-assignment clauses protect only the obligor and do not affect the transaction between the assignee and assignor.

Usually, a prohibition against the assignment of a contract does not prevent an assignment of the right to receive payments due, unless circumstances indicate the contrary. Moreover, the contracting parties cannot, by a mere non-assignment provision, prevent the effectual alienation of the right to money which becomes due under the contract.

A contract provision prohibiting or restricting an assignment may be waived, or a party may so act as to be estopped from objecting to the assignment, such as by effectively ratifying the assignment. The power to void an assignment made in violation of an anti-assignment clause may be waived either before or after the assignment. See our article on Contracts.

Noncompete Clauses and Assignments:

Of critical import to most buyers of businesses is the ability to ensure that key employees of the business being purchased cannot start a competing company. Some states strictly limit such clauses, some do allow them. California does restrict noncompete clauses, only allowing them under certain circumstances. A common question in those states that do allow them is whether such rights can be assigned to a new party, such as the buyer of the buyer.

A covenant not to compete, also called a non-competitive clause, is a formal agreement prohibiting one party from performing similar work or business within a designated area for a specified amount of time. This type of clause is generally included in contracts between employer and employee and contracts between buyer and seller of a business.

Many workers sign a covenant not to compete as part of the paperwork required for employment. It may be a separate document similar to a non-disclosure agreement, or buried within a number of other clauses in a contract. A covenant not to compete is generally legal and enforceable, although there are some exceptions and restrictions.

Whenever a company recruits skilled employees, it invests a significant amount of time and training. For example, it often takes years before a research chemist or a design engineer develops a workable knowledge of a company’s product line, including trade secrets and highly sensitive information. Once an employee gains this knowledge and experience, however, all sorts of things can happen. The employee could work for the company until retirement, accept a better offer from a competing company or start up his or her own business.

A covenant not to compete may cover a number of potential issues between employers and former employees. Many companies spend years developing a local base of customers or clients. It is important that this customer base not fall into the hands of local competitors. When an employee signs a covenant not to compete, he or she usually agrees not to use insider knowledge of the company’s customer base to disadvantage the company. The covenant not to compete often defines a broad geographical area considered off-limits to former employees, possibly tens or hundreds of miles.

Another area of concern covered by a covenant not to compete is a potential ‘brain drain’. Some high-level former employees may seek to recruit others from the same company to create new competition. Retention of employees, especially those with unique skills or proprietary knowledge, is vital for most companies, so a covenant not to compete may spell out definite restrictions on the hiring or recruiting of employees.

A covenant not to compete may also define a specific amount of time before a former employee can seek employment in a similar field. Many companies offer a substantial severance package to make sure former employees are financially solvent until the terms of the covenant not to compete have been met.

Because the use of a covenant not to compete can be controversial, a handful of states, including California, have largely banned this type of contractual language. The legal enforcement of these agreements falls on individual states, and many have sided with the employee during arbitration or litigation. A covenant not to compete must be reasonable and specific, with defined time periods and coverage areas. If the agreement gives the company too much power over former employees or is ambiguous, state courts may declare it to be overbroad and therefore unenforceable. In such case, the employee would be free to pursue any employment opportunity, including working for a direct competitor or starting up a new company of his or her own.

It has been held that an employee’s covenant not to compete is assignable where one business is transferred to another, that a merger does not constitute an assignment of a covenant not to compete, and that a covenant not to compete is enforceable by a successor to the employer where the assignment does not create an added burden of employment or other disadvantage to the employee. However, in some states such as Hawaii, it has also been held that a covenant not to compete is not assignable and under various statutes for various reasons that such covenants are not enforceable against an employee by a successor to the employer. Hawaii v. Gannett Pac. Corp. , 99 F. Supp. 2d 1241 (D. Haw. 1999)

It is vital to obtain the relevant law of the applicable state before drafting or attempting to enforce assignment rights in this particular area.

Conclusion:

In the current business world of fast changing structures, agreements, employees and projects, the ability to assign rights and obligations is essential to allow flexibility and adjustment to new situations. Conversely, the ability to hold a contracting party into the deal may be essential for the future of a party. Thus, the law of assignments and the restriction on same is a critical aspect of every agreement and every structure. This basic provision is often glanced at by the contracting parties, or scribbled into the deal at the last minute but can easily become the most vital part of the transaction.

As an example, one client of ours came into the office outraged that his co venturer on a sizable exporting agreement, who had excellent connections in Brazil, had elected to pursue another venture instead and assigned the agreement to a party unknown to our client and without the business contacts our client considered vital. When we examined the handwritten agreement our client had drafted in a restaurant in Sao Paolo, we discovered there was no restriction on assignment whatsoever…our client had not even considered that right when drafting the agreement after a full day of work.

One choses who one does business with carefully…to ensure that one’s choice remains the party on the other side of the contract, one must master the ability to negotiate proper assignment provisions.

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Construction notes

Legal terms explained: assignment.

This post is part of the following categories:

Construction Law (Journal) , Legal Terms Explained

What is assignment?

An assignment is the transfer of an interest from one party (“ assignor ”) to another (“ assignee ”). Assignment allows the assignor to transfer the benefit of a contract to the assignee. For example, the tenant of recently built office premises may transfer the benefit of a collateral warranty originally granted in its favour to a subsequent tenant.

Without express words, assignment usually involves an assignment of accrued and future rights. Clear words are required to assign only future rights under a contract ( Energy Works (Hull) Ltd v MW High Tech Projects UK and others [2020] EWHC 2537 (TCC)).

Assignment in a construction context typically refers to a legal or equitable assignment (although assignment can also occur by other means, e.g. operation of law). A key difference between legal and equitable assignments is that, in the case of a legal assignment, the assignee may enforce any assigned rights in its own name. In contrast, following an equitable assignment, the assignee would need to join the assignor in any action brought to enforce its rights.

To take effect as a legal assignment under English law, an assignment must comply with section 136(1) of the Law of Property Act 1925 (“ LPA 1925 “). This requires the assignment to be: (i) in writing; (ii) absolute; and (iii) expressly notified in writing to the other party to the contract (“ debtor “). In practice, parties tend to effect a legal assignment by way of an assignment agreement or deed of assignment to ensure that these requirements are satisfied.

However, if the parties fail to meet any of the requirements set out in LPA 1925 the assignment will usually have equitable effect. Equitable assignments may arise orally or in writing, and whilst recommended, there is no need to notify the debtor, provided a clear intention to assign can be established. Neither legal nor equitable assignments generally require the debtor’s consent.

  Assignment v novation

Although both terms are sometimes used interchangeably, assignment should be distinguished from novation. The most notable difference is that assignment only transfers the benefit of a contract (e.g. a warranty that works have been carried out to the required standard), whereas a novation transfers both the benefit and the burden (e.g. an obligation to pay for a service). As novation also requires the consent of all parties, it will typically be effected by a tripartite agreement between the novating party, the party to whom the contract is to be novated, and the counterparty to the relevant contract.

  Some issues concerning assignment

• Restrictions on assignment – Unless there is an express prohibition in the contract, the parties will usually be free to assign the benefit of a contract. However, many standard form building contracts, including the JCT Design and Build Contract, prohibit assignment, or allow it only subject to certain conditions. In this regard, a developer may seek to amend the contract to reduce any restrictions on their ability to assign. In contrast, a contractor may seek to limit any rights to assign, for example by specifying the number of permitted assignments. This is often linked to the contractor’s professional indemnity insurance terms which may provide for restricted cover in respect of successive assignments.
• Ineffective assignment where prohibited – If a party purports to assign a right in contravention of an assignment clause, the assignment will only be effective as between the assignee and the assignor, and will not be enforceable against the debtor.
• Means of assignment – A clause in a contract permitting assignment is not sufficient to effect an assignment. There must be a separate document or oral agreement to show the assignor’s intention to assign ( Allied Carpets Group Plc v Macfarlane (t/a Whicheloe Macfarlane Partnership) [2002] EWHC 1155 (TCC)).

* This is an updated version of an article originally published as part of the ‘Legal Terms Explained’ series of Construction Law .

For further information, please contact James Doe, David Nitek, Noe Minamikata or your usual Herbert Smith Freehills contact.

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Equitable assignment

Practical law uk glossary 2-107-6540  (approx. 3 pages).

• The assignor can inform the assignee that he transfers a right or rights to him.
• The assignor can instruct the other party or parties to the agreement to discharge their obligation to the assignee instead of the assignor.
• General Contract and Boilerplate

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Center for the Advancement of Teaching Excellence

Equitable assessments & grading practices.

Nicole Messier, CATE Instructional Designer December 5, 2022

WHAT? Heading link Copy link

Equitable assessments and grading practices emphasize the process of learning versus performance outcomes and the attainment of grades.  Focusing on the process of learning can empower and motivate students by providing opportunities for autonomy, agency, and self-regulation of learning.

Characteristics of Equitable Assessments & Grading Practices

Some characteristics of equitable assessments and grading practices include (Talbert, 2021):

• Aligns to course goals and learning objectives
• Respects student diversity
• Incorporates flexibility and choice
• Monitors progress
• Provides feedback

Allows for failure through multiple attempts

Equitable Assessments

characteristics of equitable assessments Heading link Copy link

Please select the following characteristics of equitable assessments and grading practices to learn more.

Aligns to Course Goals and Learning Objectives

Equitable assessments are directly aligned with a course’s goals and objectives. These assessments utilize a form of criterion-based grading; focusing on evaluating individual student performance based on defined grading criteria versus norm-referenced grading where students are compared to other students’ performances (visit the HOW section for more information).

Respects Student Diversity

Equitable assessments and grading practices respect the diversity of students’ social identities as well as the diversity of student interests. These assessments and grading practices recognize that students have varying lived experiences and background knowledge. Instructors who implement these practices seek to meet students where they are and remove barriers to learning. Please visit the teaching guide on Universal Design for Learning for more information on removing barriers.

Equitable assessments focus on measuring learning that was taught during the course without penalizing students for prior gaps in knowledge or skills. And equitable grading focuses on reducing assessment biases (unfairly penalizing students based on their race, gender, socio-economic status, etc.) as well as promoting a growth mindset (a belief that ability is developed over time), self-efficacy (belief in one’s capacity), and student agency (belief in one’s power to attain a goal through action). Please visit the teaching guide on Rubrics for more information on reducing assessment biases and visit the HOW section for information on anonymous grading.

Incorporates Flexibility and Choice

Equitable assessments and grading practices incorporate flexibility by providing student choice.  For example, students can create a learning plan on how they will demonstrate the achievement of the learning objectives. Or students can select from a list of products or performances to demonstrate their proficiency in the learning objectives. Please visit the teaching guide on Authentic Assessments for more information on student choice and authentic assessments.

Flexibility in assessments and grading practices can also involve the level of participation or work students choose to complete during the learning process. For example, creating a contract ( labor-based grading ) where students select the grade they want to achieve and the corresponding amount of work. Other practices include using tokens (or free passes), dropping the lowest scores, averaging scores from multiple attempts, etc. (please visit the HOW section for more information). These grading practices recognize that learning doesn’t happen once and that events occur outside the learning environment that can impact student performance on assessments.

Monitors Progress

Equitable assessments are designed as progress indicators for students and instructors to know whether the achievement of the course goals and learning objectives has occurred.

For example, instructors can utilize a rubric to explain how students exceeded, met, or did not meet the course goal or learning objective. Also, equitable assessments give students the opportunity to self-assess, self-regulate, and develop actionable next steps in their learning.

Provides Feedback

Equitable grading moves beyond just scoring assessments by providing specific, meaningful, and personalized feedback. Equitable assessments create a feedback loop where students engage in learning, produce work to practice, receive feedback, and revise or reattempt work to demonstrate proficiency in the learning objectives.

Students can use feedback to monitor their learning and progress toward their goals. And instructors can use feedback to foster conversations about student-developed goals and next steps.

Equitable assessments and grading practices recognize that assessments should not be a one-and-done experience and should allow for revisions, resubmissions, or reattempts without penalty. Instructors who utilize equitable assessments and grading practices know that failure is just a “first attempt in learning” and encourage students to take risks by providing a safe and supportive learning environment.

For example, students are given multiple opportunities to demonstrate the achievement of the learning objectives for a written assignment allowing students who do not meet the grading criteria to revise and resubmit their assignments.

WHY? Heading link Copy link

Equitable assessments and grading practices help to break the cycle of the “minimax principle” (least amount of work for the greatest gain) regarding student motivation and effort. Student motivation shifts from extrinsic motivators (grades) to intrinsic motivators (learning for the sake of learning); where students demonstrate self-regulation of learning and set personal learning goals.

Equitable assessments and grading practices can positively impact students’ learning in several ways (Carberry, 2016; Lindemann, 2011; Katzman, 2021; Schinske, J., 2014; Williams, 2020):

• Provides reflective practice, metacognition, and opportunities for students to self-assess
• Supports collaboration and cooperation between peers and instructors
• Decreases competitiveness between peers
• Reduces student stress
• Fosters growth mindset (a belief that ability is developed over time) versus a fixed mindset (a belief that ability doesn’t change)
• Encourages the use of feedback to learn from mistakes
• Increases intrinsic motivation, self-efficacy, and student agency
• Rewards improvement and decreases students’ fear of failure
• Encourages creativity, innovation, and risk-taking
• Improves student retention

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Start with course goals and objectives.

Equitable assessments and grading practices focus on evaluating individual student performance based on defined grading criteria aligned with clear and measurable course goals and learning objectives.

• Course goals or outcomes are the “big ideas” or essential concepts that you want students to be able to do and know by the end of your course.
• Weekly or module learning objectives can be designed to break down those “big ideas” into more manageable goals based on specific concepts or themes. These weekly or module learning objectives are then aligned with the course’s assessments, learning activities, and instructional materials.

Each course goal and learning objective should contain a behavior (an action verb) and a condition (or construct) that needs to be met to demonstrate achievement.  For example, in the following learning objective, the action verb is “describe”, and the condition is “past public policy debates…”

• Describe past public policy debates in the United States that exemplify a broad range of historical and contemporary concerns (from Carnegie Mellon University ).

The course goals, learning objectives, and grading criteria can be used to communicate the why behind your assessment and grading practices. Please visit the teaching guide on Rubrics for more information on grading criteria.

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Implementing equitable assessments and grading practices.

Consider adding one or more of the following elements to increase the equity of your assessments and grading practices. These elements can be implemented in any size course, discipline, or course modality:

• Incorporating personal learning goals
• Supporting executive function skills
• Providing multiple forms of feedback
• Re-assessing without penalty & multiple attempts
• Grading for completeness vs. correctness
• Anonymous grading
• Rethinking the grading of participation
• Adding tokens and other forms of flexibility

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Please select the following elements to learn how they can help support student success.

Incorporating Personal Learning Goals

Personal learning goals can provide improved student agency (belief in one’s power to attain a goal through action) and increased student ownership of their learning. In general education coursework, these goals can help create a more meaningful learning experience for students who don’t see the importance of “required” non-major coursework. Consider developing a few course goals that incorporate the human dimension or caring categories from Fink’s Taxonomy to have students select from. Or consider having students reflect on the instructor-designed course goals and objectives to create their personal learning goal(s).

These goals could be shared with instructors privately in a journal or with the entire class in a discussion forum. Students can then design a summative authentic assessment to demonstrate the achievement of their personal learning goals. Please visit the teaching guide on Authentic Assessments for more information.

For example, a student could decide to write a reflection on knowledge gained for each of the following learning objectives and create a persuasive presentation to advocate for a policy change for their final summative assessment.

• Describe past public policy debates in the United States that exemplify a broad range of historical and contemporary concerns.
• Advocate for particular policy choices using the knowledge and skills gained in this course (from Carnegie Mellon University ).

Also, students can reflect on their learning progress throughout the semester to foster metacognition (understanding one’s thought process), self-regulate their learning, and set actionable next steps toward their personal learning goals. Student personal learning goals can also be supported through the use of an equitable grading system like specifications grading and ungrading in both general education coursework and major coursework. Please scroll down to learn more about equitable grading systems and visit the CAST website to learn more about goal setting and monitoring progress .

Supporting Executive Function Skills

Executive functions are the mental processes that control the goal-oriented skills and behaviors of students. These skills and behaviors include paying attention, organizing and prioritizing tasks, remembering details, starting tasks, staying focused, managing time, solving problems, and regulating emotions.

Some considerations for supporting executive function skills (visit the Additional Resources section to download a template for supporting executive function skills), including how you organize and communicate the assessment information to students, for example:

• Overview – use this heading to communicate the learning goals and objectives, background information, and the time it will take to complete the assessment. This information provides the why behind your assessment and supports students’ time management skills.
• Instructions – use this heading to communicate the sequential steps or bulleted list of what students need to do for the assessment. This information presented in a list format helps students know what they must accomplish in the assessment and ensures that elements are not missed.
• Submission Requirements – use this heading to communicate a bulleted list of what students will submit. For example, a 2 to 3-page essay with an APA formatted reference page containing three credible sources.
• Grading Criteria (or Rubric) – use this heading to communicate a table or bulleted list of what students will receive feedback on and how their work will be evaluated. This information helps students to understand the expectations of the assessment.
• Resources – use this heading to communicate a bulleted list of support materials for student success, including FAQs, databases, tutorials, and an exemplar (exemplary work sample). This information helps students start the assessment and support students who haven’t developed the research or other skills needed yet. Please visit the teaching guide on Rubrics for more information on how to use exemplars with students.

Other considerations include utilizing the learning management system to place static reminders in the course’s weekly learning modules, create announcements to remind students about important milestones and due dates, utilize a Q&A discussion board for student questions, and host drop-in hours via an online conference tool ( Zoom ) before the assessment due date for students to attend for support. In on-campus, hybrid, or online synchronous courses, instructors can provide “class time” for questions about upcoming assessments as well as verbal reminders to keep students on track. Please visit the CAST website to learn more about supporting executive function skills and visit the Additional Resources section to download a template for supporting executive function skills.

Providing Multiple Forms of Feedback

Instructors who utilize equitable assessments and grading practices know that providing multiple forms of feedback is essential to student success, including:

• Self-evaluation – students assess their own learning and performance with a rubric (or checklist) to determine strengths and weaknesses, as well as the next steps in their learning.
• Peer review – students anonymously provide qualitative feedback to their peers with or without a rubric or checklist.
• Group feedback – students work collaboratively with a group of peers through multiple iterations of work and have synchronous or asynchronous discussions about each other’s work.
• Class feedback – the instructor develops a list of common mistakes or issues for students to evaluate their work against the list.
• Personalized feedback – the instructor provides individual, descriptive feedback to students.

Equitable assessments provide opportunities for students to act after receiving feedback. This action can involve a discussion with the instructor (or group) on how they can reach their learning goals, a revision of the assessment where students can apply the feedback, and/or a summary of the feedback received with a reflection on their learning goals and next steps.

Want to learn more about providing descriptive feedback? Please read the blog post, The care and feeding of Helpful Feedback by Robert Talbert.

Re-assessing without Penalty & Multiple Attempts

Equitable assessments and grading practices allow students to revise, resubmit, or reattempt without penalty . Students can use the received feedback to improve their learning and performance without focusing on or stressing about their grades.

One consideration is to postpone sharing the grades with students if they do not achieve all the grading criteria and provide them with feedback for their reattempts. Students will then be encouraged to utilize the feedback and focus on learning from their mistakes. Students’ grade is then based on the achievement of the grading criteria without penalty for needing a second attempt.

In large class sizes, instructors might limit resubmissions to one or two assessments to ensure the grading is manageable for themselves or TAs. Or instructors of large classes can incorporate peer review on a first draft and have students provide feedback based on the same rubric the instructor will use to grade the final submission.

Another consideration is to allow students unlimited attempts on low-stakes quizzes and provide them with feedback on incorrect answers that directs them to learning materials to review before reattempting. The quizzes can be built from multiple pools of questions so that each attempt is unique. Study groups can address common mistakes and issues from class performance. Students’ highest scores are then recorded in the grade book.

Grading for Completeness vs. Correctness

Equitable assessments and grading practices recognize that students need to practice and participate in active learning experiences to demonstrate the achievement of course goals and learning objectives successfully. Student practice is usually in the form of a formative assessment (an assessment that occurs during learning), including polling, quizzing, homework, classroom assessment techniques, etc. Typically, these assessments award points for correct answers and deduct points for incorrect answers reinforcing students’ dependence on extrinsic motivators.

Instead, consider providing feedback on the incorrect answers and use points based on completeness to improve the equity of your formative assessments. For example, during polling questions for a think-pair-share activity, give points for student responses regardless of correctness. In homework assignments, focus your grading on providing feedback for incorrect answers or misconceptions to support student learning and increase intrinsic motivation. Homework can be assigned a set number of points, awarded a pass/fail grade, or marked as complete based on the percentage of correct answers (e.g., students receive all the points, a pass, or it is marked completed if 70% of the questions are answered correctly).

Anonymous Grading

Anonymous grading can help to reduce bias while grading student assignments. It is essential to communicate that you will be implementing anonymous grading before students start working on and submitting assignments so that they don’t include any identifiers (name, NetID, etc.) in their submissions.

Please visit the Blackboard Help website to learn more about Anonymous Grading in Ultra and Anonymous Grading in Original .

Rethinking the Grading of Participation

Using equitable assessments and grading practices acknowledges that how a student behaves in class does not necessarily reflect the level of learning a student achieves. These practices encourage academic behaviors that support student success, like awarding a token or extra credit for students who attend a student group session and write a reflection on how their learning changed.

Or students attend drop-in office hours to get help with a formative assessment and then resubmit the work without penalty. These practices reinforce academic behaviors and promote intrinsic motivation. Consider how you will define and communicate participation expectations to students to support and encourage academic behaviors without penalizing non-performance and reducing student engagement.

Adding Tokens and Other Forms of Flexibility

Equitable assessments and grading practices recognize that a student’s life can impact their learning and performance. Instructors can consider adding elements to their assessments and grading practices to increase equity, including tokens, free passes, dropping the lowest score(s), and/or averaging scores.These elements minimize risk, reduce student anxiety and stress, and encourage improvement.

Tokens & Free Passes A token system can involve students receiving three to four tokens at the beginning of the term. Tokens are then exchanged for an extension on a due date, revision or reattempt on an assessment, missing class, leaving class early, dropping a low score, etc. Also, students can earn more tokens for behaviors like submitting an assessment earlier than the due date, attending campus or community events related to the course, or completing optional assessments for deeper learning (Leslie, 2020). Free passes (similar to tokens) can be given to students at the beginning of the semester for missing a class session or turning in an assignment late.

Dropping Lowest Scores & Averaging Scores Dropping the lowest score or averaging scores for formative assessments like quizzes or written assignments can also reduce student stress and encourage students to practice and learn from their mistakes. For example, an instructor gives weekly low-stakes quizzes where students’ lowest score is dropped from their total grade. Or the instructor averages all the written assignments in the course, and students receive a set number of points based on that average instead of totaling points for individual assignments (e.g., 90% average earns 250 points, 80% earns 200 points, and so on).

Adopting an Equitable Grading System Heading link Copy link

Adopting an equitable grading system.

Please take a few minutes to consider various equitable grading systems that might work for your course:

• Criterion-referenced grading
• Labor-based grading
• Specifications grading

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Please select the following grading systems to learn more.

Criterion-referenced Grading

Criterion-referenced grading (also known as competency-based or standards-based grading) focuses on evaluating individual student performance based on defined grading criteria. These criteria can be in the form of learning objectives or competencies, or they are refined further to reflect smaller skill sets or more granular concepts. In criterion-referenced grading, students have multiple opportunities to demonstrate their proficiency. Students receive feedback on whether they “met the criteria” or “did not meet the criteria.” Instructors can utilize a single-point rubric or a checklist to evaluate student learning, communicate progress, and have students self-assess (please visit the teaching guide on Rubrics for more information on single-point rubrics or checklists).

In criterion-referenced grading, student’s grades are based on the percentage of learning objectives that are met (e.g., if students meet 90% or more of the learning objectives they receive an A, for 80% of the learning objectives they receive a B, for 70% of the learning objectives  they receive a C, and so on). Or individual students are assigned grades according to predetermined thresholds for grade cut-offs (“straight-scale”), which correspond to students’ progress towards achievement of the learning objectives. The assessments are not based on how students perform relative to other students in a class, a practice referred to as norm-referenced grading (“grading on a curve”). These assessments involve assigning grades regardless of an individual student’s rank in the class or how many students score above or below the threshold and recognize that not all students benefit from a competitive classroom climate created when norm-referenced grading practices are employed. For more information on criterion-referenced grading, please visit the Additional Resources and References section below.

Labor-based Grading

Labor-based grading (also known as contract grading or grading contracts) focuses on providing student choice and agency. Students select the level of work (or labor) they want to attempt from the instructor-designed assessment bundles. These assessment bundles can contain different assessment types, for example, a bundle for a unit of study might have a written assignment, quiz, and two in-class activities and students must complete 9 of the 10 bundles to get an A, 8 to get a B, and 7 to get a C, etc.

Or bundles can be organized with similar assessments (e.g., a quiz bundle), where students can opt-out of certain bundles. For example, students can choose to omit the participation bundle and only complete the written assignments bundle and the quiz bundle (scoring higher than 75%) to receive a C. In labor-based grading, students receive feedback based on the defined grading criteria, and if they do not meet their selected bundle requirements after revision and reattempts, then they move to the next bundle grade. Please visit the teaching guide on Rubrics for more information on grading criteria and the Additional Resources and References section below for more information on labor-based grading.

Specifications Grading

Specification grading (or specs grading) combines criterion-referenced grading, labor-based grading, and pass/fail systems to promote student self-efficacy to meet specifications such as the learning objectives or desired competencies. Instructors utilize backward design to create bundles aligned with the learning objectives at different amounts of work and/or levels of complexity. For example, students might have to complete more bundles or more complex bundles to receive an A. Information on the expectations to achieve the bundles is clearly communicated to students. However, unlike contract grading, students are not required to tell their instructor the bundles they aim to achieve.

Student performance is evaluated as either meets or does not meet the specifications. If a student’s performance does not meet the specifications, then the student does not get credit for the work, and can reattempt the assessment until they meet the specifications. Like criterion-referenced grading, instructors can utilize a single-point rubric or a checklist to evaluate student learning and performance, communicate progress, and have students self-assess. Please visit the teaching guide on Rubrics for more information on single-point rubrics or checklists. And for more information on specifications grading, please visit the Additional Resources and References section below.

Ungrading focuses on co-creating assessments with students, where students take ownership of the learning and assessment process. Ungrading utilizes multiple feedback forms (self, peer, and instructor) to encourage students to revise and resubmit work. Instructors who use ungrading do not assign grades for work completed.

Instead, students are expected to reflect on their learning throughout the semester as well as assign their final grade and consult with their instructor based on their self-assessments, reflections, received feedback, and portfolio of work. Please visit the Additional Resources and References section for more information on ungrading.

GETTING STARTED Heading link Copy link

Getting started.

First , you review your course goals and learning objectives to ensure they are clear and measurable.

Then , identify the grading criteria to measure the achievement of the course goals and learning objectives.

Next , consider how you will incorporate the following elements as you design or redesign assessments and grading practices for equity:

• Allow students to set personal learning goals.
• Add elements to support executive function skills.
• Incorporate multiple forms of feedback (self, peer, group, course, instructor).
• Provide multiple attempts or re-assessment without penalty.
• Consider how you will grade for completeness and not for student participation.
• Utilize anonymous grading features available in the LMS.
• Determine what form of flexibility (tokens, free passes, etc.) you will utilize.

Lastly , review data collected from assessments and grading practices and reflect on the implementation to inform continuous improvements for equitable student outcomes.

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Citing this guide.

Messier, N. (2022). “Equitable Assessments & Grading Practices.” Center for the Advancement of Teaching Excellence at the University of Illinois Chicago. Retrieved [today’s date] from  https://teaching.uic.edu/resources/teaching-guides/assessment-grading-practices/equitable-assessments-grading-practices/

ADDITIONAL RESOURCES Heading link Copy link

Clark, D., Talbert, R. (n.d.) About Grading for Growth [Blog] Grading for Growth

Hall, M. (2018). What is Specifications Grading and Why Should You Consider Using It? [Blog] The Innovative Instructor Blog. Johns Hopkins University.

Louden, K. (2017). Delaying the grade: How to get students to read feedback. [Blog] Cult of Pedagogy

Stommel, J. (2020). Ungrading: an FAQ . [Blog] Jesse Stommel

Blum, S. (2020). Ungrading, why rating students undermines learning (and what to do instead) . West Virginia University Press.

Feldman, J. (2019). Grading for equity, what it is, why it matters, and how it can transform schools and classrooms . SAGE Publications.

Inoue, A. (2019). Labor-based grading contracts, building equity and inclusion in the compassionate writing classroom. University Press of Colorado.

Nilson, L. (2015). Specifications grading . Stylus Publishing.

Podcasts & Templates

Nilson, L. (2021). Specifications grading: Restoring rigor, motivating students, and saving faculty time. [Podcast ] Psych Sessions, Convos About Teaching N’ Stuff.

Template for Supporting Executive Function Skills

REFERENCES Heading link Copy link

Carberry, A., Siniawski, M., Atwood, S., Diefes-Dux, H. (2016). Best practices for using standards-based grading in engineering courses. https://www.researchgate.net/publication/310589873_ Best_Practices_for_Using_Standards-based_Grading_in_Engineering_Courses

Katzman, S., Hurst-Kennedy, J., Barrera, A., Talley, J., Javazon, E., Diaz, M., Anzovino, M. (2021). The effect of specifications grading on students’ learning and attitudes in an undergraduate-level cell biology course. Journal of Microbiology & Biology Education. 22. 10.1128/jmbe.00200-21. https://www.researchgate.net/publication/355767907_ The_Effect_of_Specifications_Grading_on_Students’_ Learning_and_Attitudes_in_an_ Undergraduate-Level_Cell_Biology_Course

Leslie, P., Lundblom, E. (2020). Specifications grading: What it is, and lessons learned. Seminars in Speech and Language. 41. 298-309. 10.1055/s-0040-1713781. https://www.researchgate.net/publication/343143573 _Specifications_Grading_What_It_Is_and_Lessons _Learned

Lindemann, D., Harbke, C. (2011). Use of contract grading to improve grades among college freshmen in introductory psychology. Sage Open. 1. 10.1177/2158244011434103. https://www.researchgate.net/publication/233408578_ Use_of_Contract_Grading_to_Improve_Grades_Among_ College_Freshmen_in_Introductory_Psychology

Schinske, J., Tanner, K. (2014). Teaching more by grading less (or differently). CBE Life Sci Educ. 2014 Summer;13(2):159-66. doi: 10.1187/cbe.cbe-14-03-0054.

Talbert, R. (2021). Finding common ground with grading systems. [Blog] Grading for Growth. https://gradingforgrowth.com/p/finding-common-ground-with-grading

Williams, H. (2020). Will students engage if there are no grades? A review of the evidence, and an experiment in ungrading. 10.21125/iceri.2020.0605. https://www.researchgate.net/publication/346625604_ Will_Students_Engage_If_There_Are_No_Grades_ A_Review_of_the_Evidence_and_an_Experiment_in _Ungrading

What is Equitable Interest? Common Equitable Interest Examples

What is equitable interest.

An equitable interest is defined as “an interest held by virtue of an equitable title (a title that denotes a beneficial interest in the property and allows the possessor the right to obtain formal legal ownership) or claimed on equitable grounds, such as a trust beneficiary’s interest.”

A right in equity that can be protected by an equitable remedy is known as an equitable interest.

Only in systems affected by the common law (connotation 2) heritage, such as New Zealand, England, Canada, Australia, and the United States, can this idea exist.

Common Equitable Interest Examples

Equitable rights to a property do not confer the same rights as legal ownership to the property. Courts, on the other hand, recognize these interests because ‘it is right and fair to do so.’

Equitable title does not transmit legal ownership of the property; rather, it grants the individual or entity the right to use and enjoy the property. These are some common instances of this type of interest:

• The interest of a beneficiary in a fixed trust
• The interest of a partner in the partnership
• Proprietary interests that are common law interests’ equivalents
• Security interests that are equitable
• Land rights that are equitable

Mary and Gustav formed a partnership and bought an investment property. Although Mary contributed 50% of the purchase price, the legal title is in Gustav’s name.

Although Mary is not the legal owner of the property, she has an enforceable equitable interest in it.

What exactly is Equitable tittle?

Equitable title refers to the ability to use and enjoy the property but is not synonymous with “real ownership.”

In court, anyone with equitable ownership could not claim to be the legal owner or possession of the property.

This necessitates the acquisition of a legal title. Having equitable title, on the other hand, gives the person greater consistent authority over the property.

Because someone with equitable title has the rights to “benefit from” and “enjoy” the property, this often comes with the obligation to finance it.

Furthermore, equitable title grants the holder the right to gain formal legal ownership as well as access to the property.

When purchasing any property, it is critical to get both equitable and legal ownership. This includes the right to eventual full ownership and property interest.

Equitable title establishes a person’s financial interest in a piece of property. This is why a property investor can hold equitable title and list a property even if legal title does not exist.

However, they are unable to sell the property.

Legal Title

Before we can understand what, an equitable interest is, we must first understand why it can arise. Equitable interests arise when there is an interest in a property but the party with the interest does not have legal title.

Legal title is the genuine and enforceable ownership of a property. Except in the case of an equitable interest, this cannot be easily overridden.

A legal title entails numerous responsibilities, such as the upkeep, use, and ownership of real estate. A common example of this is the Torrens title system of land ownership, in which a legal interest is registered on the title of the property.

Although this type of ownership appears to be absolute, there are some circumstances in which it can be challenged. This is known as an ‘equitable interest.’

Equitable interest vs legal interest

Despite the fact that they both represent a sense of ownership over an asset, legal interest and equitable interest are not the same thing.

When a person has legal interest in an asset, he has ownership and can legally enforce his rights over the asset. When a person has equitable interest in an asset, he or she can use it without legally owning it.

The following example demonstrates the distinctions between equitable and legal interest.

Amy has agreed to buy a house from Daniel under a contract that states that Amy (the buyer) will pay the price of the house in installments and that once the price is paid in full, Daniel (the seller) will transfer the deed to Amy.

In this scenario, Amy has an equitable interest in the house because she can live in it and enjoy it but does not have legal title to it. Daniel will retain legal ownership of the house until Amy pays the balance in full, at which point legal ownership will be transferred to Amy.

Amy can benefit if the property’s value has increased between the time the agreement was drafted and the time the last installment was made.

However, if the property’s value falls, she will suffer a loss.

The equitable interest differs from the legal interest in two important ways:

A legal title can be conveyed from one person or entity to another. In this case, both parties must sign documents and pay fees in order to complete the transfer. This is a relatively quick and simple process.

A legal title cannot be challenged by the law. If a property owner does not prove their ownership, then they have no legal title to the property at all. This means that anyone can take possession of the property.

How Equitable Interest impacts who can sell the property

People frequently come into contact with equitable interest because someone is selling a property that they do not own.

These listings will most likely be on a local listing website rather than the MLS, but the issue of ownership remains.

It is frequently true that only the owner of a property can sell it unless you have an equitable stake in it.

In these circumstances, the seller’s equitable interest will be derived from one of several sources:

• Purchase and sell agreement
• A contract with an option
• A deed contracts
• A lease option agreement
• A letter of permission for a short sale

When you come across someone listing a property that they do not legally own, you are most likely dealing with a wholesaler.

A property is normally sold by a wholesaler once a buy and sale agreement is signed.

Instead of purchasing the property outright, they can become the equitable interest holder and advertise it.

When a prospective buyer agrees to sign a purchase and sale agreement, the investor signs it as the seller.

The contract will include a clause stating that the sale is conditional on his purchase of the property.

The investor can sometimes assign his initial purchase contract with the seller to the investor’s end-buyer, and the end-buyer really closes by taking over the investor’s duty for the original contract.

The property will eventually be purchased by the end-user, and the distributor will earn an assignment fee. Remember that, unlike realtors, investors do not receive a commission.

Rather, they work to find buyers through marketing efforts, and having equitable interest aids them in this endeavor.

Purchasing properties, taking a financial risk, and selling them to buyers pays off in the long run. Throughout this process, many investors also rehab and transform neighborhoods.

Situations where Equitable and Legal tittle interact

Ownership rules vary depending on where you live. According to the deed, the property seller is not necessarily the legal holder of the piece of real land. The law may permit two parties to have different equitable and legal titles.

A land contract is one example of a situation in which legal and equitable title is shared. In this situation, the seller gives finance to the buyer in the form of a payment plan.

Instead of recording a deed transferring title to the buyer, the seller will execute a contract with the buyer stating the payment terms and the rights of both parties.

For the length of the contract, the seller will retain legal title, but the buyer will have equitable title.

That is, the buyer has the right to acquire the property as well as the obligation to maintain it. At the end of the loan period, the deed will transfer full title to the buyer, giving them legal and equitable title.

Another prominent instance in which legal and equitable title intersect is while dealing with a trust.

A trust is a legal structure in which one party (the trustee) holds property on behalf of another party (the beneficiary). In this situation, an individual will purchase a home and then register a deed giving legal title to their trust.

The trust documents, which specify the identification of the trustee and beneficiary, govern the terms of the trust. Typically, the property owner will name themselves as the beneficiary, but they may also name a child or another family member.

They may also choose to serve as trustees themselves or appoint a third party.

When the property is transferred to the trust, the trustee becomes the legal owner and has the right to sell it (subject to the terms of the trust) as well as the obligation to maintain it and defend it in court if necessary.

The beneficiary, on the other hand, has a beneficial interest in the trust (i.e., equitable title), which includes rights to the profits and income generated by the trust’s property.

Trusts are used because transferring legal title upon the death of a trustee is easier with a trust than when legal title is held by an individual. This is because the probate process can be avoided when trust is involved.

Types of Equitable Interests

Latec Investments Ltd v Hotel Terrigal Pty Ltd indicates that there are three types of equitable interests in New South Wales:

• Equitable interest- An equitable interest is a right in property that does not go through the legal title process. This is similar to how a leasehold operates, with the exception of conveyance.
• Mere equity- A mere equity is a way to acquire a property while avoiding the cost of conveyance. This is often done by entering into a contract that conveys an interest in land but which does not grant any legal title.
• Personal equity- This is a possessory interest in property that is not based on legal title. This can include an equitable interest or a mere equity.

For example, pure equity may develop when one party has been unfairly harmed as a result of the outrageous behavior of another.

According to the law established in Lysaght v Edwards, a valid contract for sale confers an equitable interest on the purchaser of the land. In Walsh v Lonsdale, it was also stated that “justice looks on as done that which ought to be done.”

A contract that does not meet the requirements of a deed as required by section 52 of the Law of Property Act of 1925 may be specifically enforced to convey the equitable interest to the new purchaser.

This rule has had a significant impact because it allows interests that were not conveyed by a deed to still be binding on future purchasers under the doctrine of constructive notice.

However, the Law of Property (Miscellaneous Provisions) Act 1989 s.2, which requires all contracts for the sale of land (which could be specifically enforceable) to be in writing, contain all the conditions of the agreement, and be signed by both parties, has lessened the impact of this regulation.

Contracts that are not in writing and signed by both parties cannot be specifically enforced and, as a result, do not create or transfer an equitable interest inland.

Equitable interest in partnership

In summary, the High Court confirms that a partner’s interest in partnership property prior to the dissolution of the partnership is an equitable interest under a unique trust, as opposed to a fixed trust.

What is Equitable interest?

Equitable interest deals with rights that may exist in a property that are not based on legal title.

What is a mere equity?

A mere equity is similar to an equitable interest, except that it has no connection to a legal right.

Generally, an individual will be able to acquire a property and then register a deed giving themselves legal title. Or, they will enter into another contract that conveys an interest in the land but does not convey any legal title.

Pure equity exists when one party has been unfairly harmed as a result of another’s outrageous or malicious behavior.

When do you get a personal equity?

A personal equity is a possessory interest in property that does not have any basis in legal title. This can include a mere equity or an equitable interest.

How do you get equitable interest?

It is a general term that refers to an interest established on fairness principles rather than a formal legal assignment of ownership. This form of interest is usually superseded by legal ownership. The Court is the sole means to have an equitable interest enforced.

What is a reversionary estate?

In the context of real estate or wills and estates, a reversionary interest is a reservation created in a real estate conveyance that the property will revert back to the original owner upon the occurrence of a certain event.

What are the two elements of an equitable interest?

An equitable interest is created when one party makes a deal with another to transfer property on certain terms. This agreement involves two major components:

• The Nature of the Property Interest; and
• The Terms of the Agreement.

What is the difference between equitable interest and legal interest?

Equitable interest is an interest in a property that is not based upon legal title.

Legal interest, on the other hand, refers to an individual’s claim to a property by virtue of their legal ownership of it.

For example, a vendor may have legal title over a piece of land, but they may also have an equitable interest in it as well.

A court order stating that the specific piece of land should be conveyed to one person is considered a conveyance order.

What is an equitable interest example?

Equitable interest is a broad phrase that refers to an interest that is established via principles of justice rather than a legal assignment of ownership. A trust beneficiary’s equitable stake is one example.

What are equitable rights and interests?

An equitable right is a legal right guaranteed by equity, as opposed to a legal right derived from a legal source. An example of an equitable right can be found in Land law, where a beneficial interest, i.e., vested interests in an estate that are protected by equity, is mentioned.

What is equitable title?

Equitable title is a type of ownership that does not necessarily involve the legal ownership of property, but rather the possessor of the property has been granted some sort of rights to it.

Can equitable interests be registered?

HM Land Registry only registers legal estates, and the proprietor is listed as the owner of a legal estate. The register documents the legal estate in the property, not the underlying ownership (the ‘equitable’ or ‘beneficial’ interests).

What is an equitable proprietary interest?

An equitable proprietary interest is a form of personal right in land that is not based on legal title.

What is an equitable remuneration right?

Equitable remuneration rights are a type of right in land that are not based on legal title, but rather upon the holder of the interest having a beneficial interest in the property.

What is an affidavit of equitable interest?

An affidavit of equitable interest is a sworn statement that contains the details of any equitable interest that you may have acquired in a property.

The affidavit must be signed by the individual who declares that they have acquired an interest in it and also attests to their knowledge about its existence. The document must be registered with a legal or official body, such as the Land Registry Office, before it becomes effective.

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Legal Dictionary

The Law Dictionary for Everyone

Equitable Estoppel

Equitable estoppel is a legal principle that stops someone from taking a legal action that conflicts with his previous claims or behaviors. Essentially, equitable estoppel is a method of preventing someone from going back on his word in a court of law. For example, equitable estoppel would be granted to a defendant if the plaintiff previously gave his permission for the defendant to do something, and then sued the defendant once he did. To explore this concept, consider the following equitable estoppel definition.

Definition of Equitable Estoppel

• A legal principle that prevents someone from taking legal action that conflicts with his previous claims or behaviors.

Origin of Estoppel

1575-1585       Middle French  estoupail

What is Estoppel

Estoppel is a term that is notoriously difficult to define in legal terminology. In its simplest form, “estoppel” translates to mean “stopped” in French, as in someone is being stopped from doing or saying something. Because the term is so vague, it has been attached to numerous areas of law. The late Lord Denning (1899-1999), an English judge who has been described as “the greatest judge of the century,” attempted to explain the difficulty of defining estoppel by saying that:

“[With estoppel], someone is stopped from saying something or other, or doing something or other, or contesting something or other.”

Types of Estoppel

The purpose of estoppel is to hopefully prevent the wasting of court resources by stopping people from abusing the legal system by filing frivolous lawsuits. However, estoppel can also be considered controversial. This is because some see it as a way of preventing people from exercising what would have been considered their legal rights if they were involved in different circumstances.

Anyone who wishes to assert an estoppel case must come to the court with “ clean hands .” This means that the person bringing the suit must not do so unethically or as an act of bad faith . This clean hands doctrine is typically stated as “those who seek equity must do equity.”

What follows are the three main types of estoppel that can be exercised in a court of law. Because estoppel is a broad term that can be defined in many ways, these are arguably the three most important types of estoppel to consider.

Equitable estoppel, simply put, is a way of stopping someone from going back on his word. It is a way of stopping someone from taking legal action that conflicts with his previous claims or behavior, or for testifying to something early on, then changing that testimony later.

Example of equitable estoppel:

Jessica takes her car to the mechanic to have some work done. During the process, the mechanic accidentally slips with one of his tools and puts a small dent in Jessica’s car. He brings Jessica’s attention to the dent and offers to fix it, but she says that it’s only cosmetic and not to worry about it.

Jessica cannot, then, file a lawsuit against the mechanic for damaging her car. If she were to do so, she would be estopped by the courts, since her claim would run counter to her earlier forgiveness of the damages that she had incurred because of the mechanic’s mistake.

Promissory Estoppel

Promissory estoppel deals with contract law . In a case concerning promissory estoppel, one person cannot promise the other party to a contract that part or all of the contract will not be enforced, only to later try to enforce that provision anyway. For instance, if an employer tells an employee that mandatory overtime will not be enforced, despite being part of the employee’s contract, the employer cannot then attempt to enforce it later. The employee is not then obligated to abide by that part of the contract, and promissory estoppel would be granted in his favor.

Collateral Estoppel

Collateral estoppel stops a person from bringing the same issue before the court once a court has ruled on it. For instance, collateral estoppel stops a party from bringing the same lawsuit against the same person, but in a different court, simply because he did not like the decision he was given in the first court. Although double jeopardy applies only to criminal trials, this is a similar concept – that once a matter has been settled by a court, it cannot be brought again.

It is important to note the distinctions between collateral estoppel and appeals. Collateral estoppel does not prevent someone from filing an appeal to have a different court reconsider the issues at hand. Instead, collateral estoppel stops someone from bringing a frivolous lawsuit by “trying to get in through the back door what he couldn’t get in through the front.” In other words, it prevents people from filing the same lawsuit in the hopes of obtaining a different result.

Doctrine of Equitable Estoppel

The doctrine of equitable estoppel prevents one person from taking advantage of another. This occurs when party A has influenced party B to act in a way that resulted in party B being injured, or incurring damages of some sort. The doctrine of equitable estoppel is founded on the principles found in fraud cases. Essentially, the doctrine of equitable estoppel prevents one party from taking a different position at trial than he took previously – especially if the other party would incur harm as a result of the change.

Legal Estoppel

There is also the concept of legal estoppel, which can be divided into two categories: estoppel by deed , and estoppel by record. Insofar as the doctrine of estoppel by deed, those who are parties to the deed for a property are prohibited from denying any of the material facts declared in the deed. Further, parties to a deed are prohibited from asserting a right or title that would be issued against the laws and rules associated with that transaction.

For example:

Betsy transfers the title of a plot of land to her daughter by deed. However, her daughter is unaware of the fact that Betsy does not actually own the land at the time of the transfer. Betsy acquires the title to the property after the transfer.

Technically, this means that Betsy’s daughter does not legally own the property because Betsy did not own the property when she transferred it to her. Betsy did not have the legal right to transfer the property to her daughter at the time of the transfer. However, under the doctrine of estoppel by deed, it is up to the court’s discretion to decide to “fix” this imperfection by finding the daughter to be the rightful owner of the property anyway.

Equitable Estoppel Example Involving Eyeglass Manufacturers

An example of equitable estoppel can be found in the case of Aspex Eyewear Inc. against Clariti Eyewear Inc. In March of 2007, Aspex Eyewear Inc. sued Clariti Eyewear Inc. alleging that Clariti violated Aspex’s patents by selling AirMag, a particular brand of eyeglass frames. Once Aspex became aware of this product, Aspex sent Clariti two letters (one for each patent) asking that they cease and desist selling the product immediately.

Clariti responded to the letters, noting that they had never intended to infringe upon Aspex’s patents. Clariti requested information from Aspex to review and responded back to Aspex that it did not believe Clariti’s products infringed upon Aspex’s patents.

After this incident, Clariti did not hear anything from Aspex for over three years. At this point, Aspex sent Clariti another letter claiming that the AirMag product infringed upon one of the patents referred to three years prior. Clariti refused to stop selling the AirMag brand, and so Aspex filed a civil lawsuit . The district court dismissed one of the infringement claims, but left the other one active – the ‘747 patent.

Clariti then moved to dismiss the remaining infringement suit, arguing that Aspex was barred by equitable estoppel, due to their remaining silent for three years on the subject. The district court granted Clariti’s motion for dismissal .

On appeal, the Court found that Aspex was misleading when convincing Clariti that Aspex did not intend to enforce the ‘747 patent against Clariti. The Court explained that the misleading conduct came in when Aspex was expected to follow up with statements or action, but failed to do so in a situation where they had an obligation to act or speak. In other words, Aspex should have followed up after receiving Clariti’s response letter. Further, the Court found that Clariti relied on Aspex’s misleading conduct to expand its business, doing so after not hearing anything else from Aspex after the initial incident.

This is where equitable estoppel came in. The evidence in the record suggested that, had Aspex filed suit against Clariti like they had originally threatened, then in all likelihood Clariti would have discontinued their AirMag line and went on to other business ventures. This was enough proof for the Court that Clariti relied on Aspex’s silence as permission to go forward, and that Aspex did not have a leg to stand on in that regard.

Expanding further on the equitable estoppel issue, the Court found that because Clariti relied on Aspex’s misleading conduct to build its business, Clariti’s business would suffer a significant economic downturn if it stopped production of the brand. Therefore, the Court ruled that the district court was correct in ruling that Clariti would suffer damages if Aspex were permitted to go forward with its charge of infringement.

The case was then escalated to the United States Court of Appeals for the Federal Circuit. The Court of Appeals affirmed the decisions of the lower courts. Clariti argued that the district court erred in not fully developing the case and finding all of the facts necessary to declare the case exceptional. Here, however, the Court noted that the district court did not hold a full trial on the issues at hand because the summary judgment involving equitable estoppel effectively ended the litigation .

Related Legal Terms and Issues

• Appeal – An application that is made to a higher court requesting a reversal of a lower court’s decision.
• Civil Lawsuit – A lawsuit brought about in court when one person claims to have suffered a loss due to the actions of another person.
• Contract – An agreement between two or more parties in which a promise is made to do or provide something in return for a valuable benefit.
• Double Jeopardy – The Fifth Amendment protection from being tried for the same crime twice, and from being compelled to testify against oneself.

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Malaysia – Statutory Assignment Vs Equitable Assignment.

December 12, 2023 by Rohin Pujari

This article attempts to provide a brief overview of the differences between statutory assignment and equitable assignment. The actual application of the general rules described here would be subject to the applicable distinct facts and circumstances.

What is Assignment?

An assignment is a transfer of rights or liabilities such as those that arise under an instrument, chose in action 1 , or debt. An assignment can either be a statutory assignment or an equitable assignment. 

In Malaysia, an assignment complying with Section 4(3) of the Civil Law Act 1956 was described as a ‘statutory assignment’ and an assignment not complying with Section 4(3) of the Civil Law Act 1956 was a ‘non-statutory assignment’ i.e., an equitable assignment. 2 The conditions of a statutory assignment are as follows: 3

• it must be absolute and did not purport to be by way of charge only;
• the assignment was in writing under the hand of the assignor; and
• express notice in writing thereof had been given to the debtor or trustee.

Meanwhile, an equitable assignment gives the assignee a right enforceable only in equity. The mode or form of assignment is absolutely immaterial provided the intention of the parties is clear. 4

Rules that Govern Assignments

Written notice is an essential part of a statutory assignment. Therefore, it is ineffective unless strictly accurate – accurate, for instance, as regards the date of the assignment and the amount due from the debtor. 5

However, notice is not necessary to perfect an equitable assignment. Even without notice to the debtor the title to the assignee is complete, not only against the assignor personally, but also against the persons who stand in the same position as the assignor, as, for instance, his trustee in bankruptcy, a judgement creditor or a person claiming under a later assignment made without consideration. 6

In regard to the form of notice, as mentioned earlier, a statutory assignment must comply with the form of notice required under Section 4(3) of the Civil Law Act 1956, whilst for an equitable assignment, no particular form is required to constitute a valid equitable assignment.

Additionally, it must be noted that although notice is not required for equitable assignments, an assignee must give notice to the debtor in order to get priority over other assignee(s). In this regard, the Federal Court in Public Finance Bhd v Scotch Leasing Sdn Bhd (In Receivership) (Perwira Habib Bank Malaysia, Intervener) [1996] 2 MLJ 369 explained in detail about the importance of notice:

“ We need to say a few words more about the great desirability of giving notice of assignment of a debt by an assignee to the debtor, even though absence of such notice does not affect the validity of the equitable assignment as between the assignor and the assignee. If notice is not given, the assignee must give credit for any payment made to the assignor by the debtor. This rule means that, by extension, even if the assignor assigns once more the debt to another person in fraud or otherwise on the earlier assignee, and that other person gives notice to the debtor; and if the debtor pays that other person or the second assignee, then the earlier assignee must still give credit to the debtor for his payment thus, for the debtor cannot be blamed for doing lawfully in ignorance of the title of the earlier assignee who has failed to give notice of the assignment to the debtor. Notice to debtor is for the protection of the assignee himself. It is this effect of what the debtor does lawfully as described that dims the view of the true role of the nemo dat rule in the resolution of disputed claims to a same debt. The money paid to the ‘second assignee’ can, of course, be recovered by the earlier assignee on the nemo dat principle. ”

• An assignee takes subject to equities

For both statutory assignment and equitable assignment, the assignee takes ‘subject to equities’, that is, subject to all such defences as might have prevailed against the assignor.

The general rule, both at law and in equity, is that no person can acquire title to a chose in action…from one who has himself no title to it. 7 In other words, the assignee can be in a no better position than the assignor was prior to the assignment. 8

• Rights incapable of assignment

Some choses in action are not assignable, and not every right which arises under or out of a contract can be assigned. 9 An example of rights incapable of assignment is where the nature of the contract is intended to be personal, therefore, it will be meaningless if it is assigned to another person.

Effect of Assignment

A statutory assignment has the sole intended effect of facilitating an assignee to sue in his own name directly irrespective of whether the chose in action is an equitable chose in action or a legal chose in action. 10

Meanwhile, the effect of an equitable assignment depends on whether the assignment is absolute or not. An absolute assignment of an equitable chose in action entitles the assignee to bring an action in his own name. 11 But a non-absolute assignment of an equitable chose in action does not entitle the assignee to sue in his own name but requires him to join the assignor as a party. 12

Nur Izzatie Azlan, Azmi & Associates

[email protected]

• ‘Chose in action’ is a known legal expression used to describe all personal rights of property which can only be claimed or enforced by action, and not by taking physical possession (Associated Tractors Sdn Bhd v Woo Sai Wa [1997] 5 MLJ 441 (High Court)).
• MBF Factors Sdn Bhd v Tay Hing Ju (T/A New General Trading) [2002] 5 MLJ 536 (High Court).
• Williams Brandt Sons & Co v Dunlop Rubber Co [1905] AC 454 (House of Lords).
• Leong, A. P. B. (1998). Cheshire, Fifoot and Furmston’s Law of Contract (2nd ed.). Butterworths Asia, at page 861.
• Guest, A. G. (1984). Anson’s law of contract, at page 400.
• Meagher, R. P., Heydon, J. D., & Leeming, M. J. (2022). Meagher, Gummow and Lehane’s Equity Doctrine and Remedies (4th ed., p. 284). Butterworths LexisNexis.
• Guest, A. G. (1984). Anson’s law of contract, at page 402.
• Lim Chon Jet @ Lim Chon Jat & Ors v Wee Ai Hua & Anor [2022] 6 MLJ 243 (Court of Appeal).

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A Focus on Equity in Math Instruction

Math teachers can use short activities based on student goals related to equity in order to make classes feel more inclusive and accessible.

Many researchers have found that improving equity, which we define as equal access and opportunities for all students, also improves student outcomes. As math teachers, we face several challenges to make our instruction more equitable. Many students feel anxious about math; additionally, math curricula usually focus on teaching abstract skills that don’t connect to students’ lives.

To learn more about teaching equity, we joined our school’s equity team. In our meetings, educators from different departments analyzed factors that disproportionately affect historically marginalized groups and devised ways to make our school more inclusive. Maria Akinyele, PhD , a leadership development expert, helped us organize the overall framework of our discussions.

Unfortunately, most of the equity and social justice math lessons we found had large projects that wouldn’t fit into our required curricula. We looked for ways to embed equity into our teaching with smaller, more frequent activities.

Four components

Our solution was to devise what we call equity tasks , which are short activities that incorporate four student goals related to equity: 

• Rigor: Students use clear and precise mathematical language while engaging in challenging mathematical content that extends their understanding.
• Identity: Students believe they can excel in mathematics by supporting each other while refining mathematical ideas and explaining how mathematics relates to their lives.
• Diversity: Students analyze different approaches and cultural contributions to mathematics.
• Justice: Students use mathematics to recommend actions that make their communities fairer.

Unlike large projects, equity tasks can be as simple as homework or a warm-up assignment. Since they’re smaller activities, they can focus on only one or two components of equity. As we developed equity tasks, we also created a rubric to help us evaluate the amount of equity in each task and plan our units more effectively.

equity Tasks

Here are four examples of equity tasks and the lessons that could include them.

1. Aim: How do we use the order of operations to evaluate numerical expressions?

Warm-up: A few years ago, a controversial meme with the mathematical problem 8 ÷ 2(2 + 2) went viral. Students use calculators to help them determine the answer.

Homework: Students create or find a similar mathematical meme, explain how to get the answer, and briefly explain common incorrect answers and methods.

Task rating:  

• Rigor: 2 (Students use precise language when discussing order of operations.)
• Diversity: 0
• Identity: 1 (Students justify their thinking to each other, but the task isn’t immediately relevant to their lives.)

2. Aim: How do we solve quadratic equations? 

Activity: Students work in groups of four. Each solves a quadratic equation using a different method (factoring, completing the square, using the quadratic formula, and graphing). They determine which method works best for each equation and justify their conclusion.

• Diversity: 2 (Students analyze different approaches to solving a problem and research Persian mathematician al-Khwarizmi’s work in completing the square.)
• Identity: 1

3. Aim: How do we combine like terms?

Pre-lesson activity: Students submit a picture of something or someone that represents them. They write a short description explaining their choice.

Warm-up: Before the lesson, teachers print out the images, group them randomly, and put them into envelopes. Students work in groups and get one envelope per group. Each group takes the images out of their envelope and organizes them by what the group thinks is “alike.” This leads to a discussion of the mathematical concept of like terms.

Task rating:  

• Diversity: 2 
• Identity: 2 (Students share items that have personal meaning.)

4. Aim: How do we use scales in maps to find distances?

Homework: Students identify local grocery stores and label them on a printed map of their neighborhood. Using an appropriate scale, they draw circles centered at each grocery store with a radius of 1 mile (for urban areas) or 10 miles (for rural areas). Locations outside these areas are considered food deserts , areas that are far from large grocery stores and have large numbers of low-income families who would have difficulty getting fresh food.

• Identity: 2
• Justice: 2 (This activity is part of a larger theme in which students learn about a problem in their community and propose concrete measures to address it.)

Other examples of equity tasks will appear online at Math Equity Tasks .

Limitations and benefits

Equity tasks have several limitations. They work best when they align with students’ interests and backgrounds, so we must take time to learn more about our students. Also, equity tasks are not isolated activities that can simply be sprinkled throughout the curriculum. They should be carefully planned out so that all four components of equity are adequately addressed over the year. Equity tasks require constant self-reflection so that teachers can develop practices that support their students.

Despite these limitations, equity tasks are powerful tools for keeping students more engaged. Creating smaller activities to do over the year is especially useful for teachers who are constrained by a mandated curriculum or teach to an end-of-year test. Most important, by strengthening our ability to weave rigor, diversity, identity, and justice into our math teaching, equity tasks make math more personal and meaningful for all students.

A new patient-acuity tool promotes equitable nurse-patient assignments

Have you ever struggled to classify a patient’s acuity level? If so, you’re not alone. Have you ever looked at your patient assignments and wondered, “Why are the assignments so unfair? How will I care for all my patients effectively?” Again, you’re not alone.

Most nurses expect patient assignments to be equitable, with each nurse bearing a fair share of the workload so all patients can receive excellent care.

Nurses’ job satisfaction depends partly on their workload and their perceived ability to deliver high quality care. Nurse-sensitive indicators (including pressure ulcers, falls, medication errors, nosocomial infections, pain management, and patient satisfaction) depend largely on nursing care and are affected by nurses’ ability to recognize and intervene when a patient’s condition changes. Nursing workloads directly influence a nurse’s ability to assess thoroughly and promote excellent patient outcomes. When patient assignments aren’t equitable, nurses may feel inadequate and frustrated.

Problems also can arise when all nurses are assigned the same number of patients without regard for acuity levels. Yet determining patients’ acuity to promote more equitable assignments can be challenging. Some hospitals or nursing units use an established acuity tool. Others rely on charge nurses’ judgments of patient acuity.

Our nurses were getting restless

At Indiana University Health Ball Memorial Hospital in Muncie, we moved our progressive care unit (PCU) to a newly constructed area of our regional medical center. A short time later, we noticed increases in patient volumes, comorbidities, device support, and overall acuity. The patients’ nursing-care requirements varied widely, so assigning the same number of patients to all nurses would mean unequal assignments.

Although were using an acuity assessment tool, our increasingly dissatisfied nurses deemed it ineffective. It called for nurses to rank each patient as a 1, 2, or 3 based on their individual perception of the patient’s status or difficulty of care required. But the tool wasn’t providing useful information because nurses’ perceptions varied; also the cultural norm tends to make nurses rate most patients a 2. In addition, when more staff nurses were needed, we lacked an objective measure to make a case for obtaining additional staff. When our hospital tested a new nurse-satisfaction survey, nurses’ discontent with their workload became apparent.

Then a PCU direct-care nurse approached the unit-based council (UBC) and asked for an evaluation of our acuity tool. The nurse manager and UBC agreed that equitable patient assignments and adequate unit staffing could be addressed by improving the tool. Following the Iowa model of evidence-based practice (EBP), the UBC formed a team of staff nurses, charge nurses, unit manager, clinical nurse specialist, and nurse researcher to explore the inquiry.

What the evidence told us

The team’s literature review found a limited amount of research pertaining to acuity tools for PCUs, even though hospital expenses decrease and high-quality nursing care increases when leaders are empowered with better, more detailed knowledge of patient acuity and nursing workloads. A recurrent theme in the literature: nurses’ voices add value to processes and nurses should be involved in assessing their own workloads and making decisions about resources. Evidence also suggested that involving staff in developing an acuity assessment tool would yield a valued, more efficient instrument that could improve nurse satisfaction and job retention.

Formulating a plan

During our literature review, we found a tool to adapt for our adult PCU. On a flip chart in the nurses’ lounge, we displayed our existing tool alongside the new tool we’d revised from the literature search. Staff viewed both tools and provided input into what made a patient’s care difficult, time-consuming, or complex. This gave us a better picture of PCU patients and helped us ensure all tasks were represented, from the least to the most time-consuming. Brainstorming meetings clarified key elements of acuity that guided continued evolution of the new tool.

Tool-development strategies

In our new tool, criteria categories included complicated procedures, education, psychosocial/therapeutic interventions, number of oral medications, and complicated I.V. drugs and other medications. Rating options on the tool run from 1 through 4, with 1 indicating low acuity and 4 indicating high acuity. Ratings are based on nursing time needed to complete a task, emotional and physical energy expenditure required, expertise required, frequency of tasks and interventions, and follow-up assessments related to a specific task. Ratings for all five criteria categories are summed up to obtain a total acuity score for each patient, ranging from 1 to 60. Then the total scores are clustered into acuity category scores, which range from 1 to 4, with 1 being the lowest acuity and 4 being the highest. (See Acuity criteria categories .)

Now we were ready to test the new tool. Initially, charge nurses from each shift tested it with the same patients on different shifts. When we found that scores between shifts weren’t congruent, we tested the tool again, with charge nurses on the same shift assessing the same patients separately. This trial yielded an inter-rater reliability of 85%—an acceptable congruency level across nurse raters.

This trial provided insight into acuity differences between shifts and helped determine how to use the tool. With our previous acuity tool, tasks and procedures of the rater’s shift determined acuity, with no consideration of upcoming tasks or procedures for the next shift. So for the new tool, the team and staff agreed nurses would proactively score acuity for the oncoming shift by calculating current and projected needs and medications.

Measuring outcomes

We identified three outcome measures as indicators of the effectiveness of the new acuity approach.

• First, the team developed an eight-item survey to measure nurse satisfaction with the new acuity assessment process, which nurses completed 1 month before the new process began and then 1 month, 6 months, and 12 months later.
• Next, the team identified items on the standardized annual employee engagement and satisfaction survey, specifically targeting workload and perception of quality of care delivered.
• Finally, we tracked nurse sensitive indicators affected by workload, including falls and hospital-acquired pressure ulcers.

Translating scores into patient assignments

To translate acuity scores into equitable patient assignments, charge nurses collected the acuity tools that direct-care nurses completed for each patient, and calculated total acuity scores and acuity category scores near the end of their shift. Then the charge nurses designed nurse-patient assignments by considering both the category score from 1 to 4 and the total acuity score of 0 to 60 for each patient, aiming to keep category scores balanced across nurses. Charge nurses also considered the geographic location of rooms on the unit, need for continuity of care, and congruency between nurses’ expertise and patient needs. (See Current acuity tool on last page .)

Unit-wide rollout

Before we rolled out the new tool, direct-care nurses on our team provided education to all PCU nurses. Teaching strategies included showing video clips of patient scenarios, presenting case studies so nurses could practice using the tool, and playing a game-show exercise to stimulate discussion of the benefits of acuity scoring. Nurses voiced favorable responses to the new tool, specifically the benefits of empowerment, assurance of quality care, patient safety and satisfaction, nurse retention, and equitable assignments. The team encouraged staff to provide feedback on the new process and expect revisions to ensure its effectiveness and sustainability.

To hardwire the new acuity assessment process, team members rounded on nurses each shift for 1 week and then three times monthly. The team answered questions, audited acuity scores, and coached nurses to achieve a highly standardized approach to scoring. During orientation, preceptors trained newly hired nurses to use the acuity assessment tool.

Charge nurses kept a log of assignments, acuity scores, and overall unit activities, overtime, and informal comments on workload. In huddles held daily for the first week, charge nurses and the nurse manager reviewed acuity scores and the process. A numerical benchmark emerged as an indicator for requesting more staffing, based on total acuity scores and acuity category scores of all patients on the unit.

Evaluation and sustainability

At the end of the first month, scores on surveys of nurse satisfaction with the new acuity assessment process showed marked improvement in nurses’ reports of the equity of patient assignments (7% satisfaction before rollout, 55% satisfaction after) and the consistency with which the acuity assessment process occurred (21% consistency before rollout, 89% consistency after). Almost 80% of nurses reported that completing the new acuity tool wasn’t a waste of time. The team implemented suggestions for refining the process and set a target goal of 85% nurse satisfaction by the 6-month evaluation.

The sustainability plan for year 1 calls for quarterly reevaluation of the acuity assessment process and semiannual reevaluation thereafter, including scoring processes, staffing level benchmarks, nurse satisfaction per survey, and nurse-sensitive outcomes. It also calls for nurses to review reports of outcome data regularly during staff meetings. When revisions are indicated, the team will provide additional education.

As the process of creating ideal nurse-patient assignments evolves, the team will explore the benefits of the synergy model, which matches nurses’ strengths and competencies with patient and family characteristics. The team may conduct qualitative research studies to better understand the complex judgments charge nurses make when creating nurse patient assignments, with the goal of standardizing the process for sustainability and optimal outcomes.

In evaluating the overall projects  experience, team members listed  lessons learned and captured key  ideas to use in future projects. (See  Acuity tool: Lessons learned by clicking the PDF icon above). The  team validated usefulness of the  Iowa model in developing the tool  and process, and recommended  adopting a model for translating evidence  into practice. Nurses on the  team reflected that a highly satisfying  aspect of the project was identifying  a clinical issue and playing an  active role in addressing it as valued  partners in the change process.

Selected references

Choi J, Choi JE, Fucile JM. Power up your staffing model with patient acuity. Nurs Manage . 2011;42(9):40-3.

Duffield C, Diers D, O’Brien-Pallas L, et al. Nursing staffing, nursing workload, the work environment and patient outcomes. Appl Nurs Res . 2011;24(4):244-55.

Fram N, Morgan B. Ontario: linking nursing outcomes, workload and staffing decisions in the workplace: the Dashboard Project. Nurs Leadersh (Tor Ont). 2012;25(Spec No 2012): 114-25.

Hardin SR, Kaplow R, eds. Synergy for Clinical Excellence: The AACN Synergy Model for Patient Care . Sudbury, MA: Jones and Bartlett; 2005.

Harper K, McCully C. Acuity systems dialogue and patient classification system essentials.  Nurs Adm Q . 2007;31(4):284-99.

Titler MG, Kleiber C, Steelman VJ, et al. The IOWA model of evidence-based practice to promote quality care. Crit Care Nurs Clin  North Am. 2001;13(4):497-509.

The authors work at Indiana University Health Ball Memorial Hospital in Muncie. Michelle Kidd is a critical care clinical nurse specialist. Kimberly Grove, Melissa Kaiser, and Brandi Swoboda are direct- care nurses in the progressive care unit (PCU). Ann Taylor is nurse manager in the PCU.

29 Comments .

Hello, I would like to request permission to utilize the patient acuity tool in my DNP project.

Hello, I would like to request permission to use this tool as a reference in my BSN assignment.

Hello Kaitlynn, The authors of the article are happy to grant others permission to use the tool. Please be sure to credit the source. Best, Cheryl Mee MSN, MBA, RN, FAAN, Executive Editorial Director, American Nurse Journal

Would like permission to use this tool for our Acute Care Floor in northern MN. Having a lot of the same issues discuss prior to your implementing…. Assignment and staffing inconsistencies, teams of 5 plus, multiple unsafe staffing scenarios. Think this would be a huge help! Thank you!

Hi, Our unit (surgical unit) are currently doing brain storming and gathering ideas on how to improve our nurse:patient assignment. We are trying to develop a patient acuity tool which would suit our patient care environment. Hoping we could reference and use your tools with your permission.

Very much appreciated.

can you share your acuity tool. We are also trying to come up with a solution instead of the admin. staffing by census…..

Can you email me at [email protected] please to discuss? Thanks!

Yes, you may.

Hi, I would love to use this as a reference to adapt an appropriate acuity tool for the medical surgical unit at our hospital. I am hoping to be granted permission to use , with appropriate citations.

Dear Micaela,

The authors of the article are happy to grant others permission to use the tool. Please be sure to credit the source.

Cynthia Saver, MS, RN

Firstly, we would like to congratulate the authors of the New Tool and we wish to be granted to use the tool with citation of the authors. What about Chemotherapy, is it under the complicated IV drugs but it is not specified? Hope to be clarified about it. Thank you.

Ruhaina Ladja,

Thank you for your interest in the acuity tool. I would venture to say chemotherapy would be included in complicated IV drugs, but in the units for which we first developed this tool the nurses did not administer chemotherapy.

Thanks again, Michelle J Kidd, MS, APRN, ACNS-BC, CCRN-K

Hi there, I am seeking permission to utilize this patient acuity tool for our evidence-based project on our IMU/ICU unit. Thank you so much.

The authors of the article are happy to grant others permission to use the tool. Please be sure to credit the source. Cynthia Saver, MS, RN, Editorial director for American Nurse Journal

Does anyone have the contact information for the authors of this tool? I would like to use this tool for my DNP project and need permission to use.

I would like to request fro your permission to utilize this tool for a pilot project initiative in my department.

The authors of the article are happy to grant others permission to use the tool. Please be sure to credit the source. Cynthia Saver, MS, RN, Editorial director for American Nurse Journal.

I am requesting permission to use this tool Thank you

I am requesting permission to use this tool on my Med/Surg floor

Thank you, Tiffany Brisken, BSN, RN, PHN

I would love to use your tool on my floor which is cardiac. I am researching and hoping this will work for us.

Wendee, the author of the article is happy to grant permission for you to use the tool.

Cynthia Saver, MS, RN, Editorial director for American Nurse Journal.

Looking to obtain permission to use tool for QI project. Please let me know who to contact.

We did contact the authors, and they gave permission for the use of the tool. Thank you for your inquiry!

-Lydia Kim, Digital Content Editor at American Nurse Today

Hello Can you help me get an acuity tool that helps nurses?

Hello Ms. Kidd,

Can I get permission to use your acuity tool for my research? Hoping for your favorable response.

Kathy Carandang

I agree! I would love to see a follow up!

Any chance to see this “patient-acuity” tool? I am working on developing one for my unit.

Awesome, this is a HUGE help.

Would love to see the follow up on this article! The results only discuss nurse satisfaction after 1 month. What happened to the results from the other nurse-sensitive indicators discussed?

I would like to use your tool for my DNP project, how would I go about contacting the right person(s) to get permission? I would appreciate your feedback.

Comments are closed.

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