South Dakota Crop Insurance Practice Exam

What is estoppel based on?

1. Previous acts or words

2. Written contracts only

3. Solely verbal agreements

4. Legal precedents

The correct answer is: Previous acts or words

Estoppel is a legal principle that prevents a party from asserting a claim or fact that is contrary to a position they previously established through their actions or words. This concept relies heavily on the notion of fairness and the importance of consistency in one's representations. When a party has made statements or taken actions that lead another party to reasonably rely on those representations, estoppel serves to hold that party to those representations to prevent injustice. In this context, previous acts or words create a foundation for the application of estoppel because they establish expectations and reliance between parties. For instance, if a farmer communicated an intention to maintain a certain practice regarding crop management and another party relied on that communication in their dealings, the farmer might be estopped from later denying that practice or acting in a way that contradicts that representation. The other options reference limitations that do not align with the principle of estoppel. Written contracts and verbal agreements can play a role in establishing the context for estoppel, but estoppel itself does not hinge exclusively on either form. Legal precedents inform the application of estoppel in various contexts, but the essence lies in the reliance on previous actions or words rather than solely on formal documentation or precedent.