What is the effect of Equitable Estoppel in real estate contracts?

The effect of Equitable Estoppel in real estate contracts primarily revolves around preventing unfair outcomes when one party has relied on the representations or actions of another party. When Equitable Estoppel is invoked, it aims to ensure that a party cannot deny the existence of a contract or a promise if the other party has acted based on that assumption to their detriment. This doctrine is particularly relevant in real estate transactions, where significant reliance on oral agreements, conduct, or informal communications may occur.

For example, if a seller verbally agrees to sell a property and the buyer takes steps based on that agreement, such as investing money or making improvements, denying the contract later could lead to inequity for the buyer. In such situations, the court may enforce the agreement despite the lack of a formal written contract, demonstrating how Equitable Estoppel serves to uphold fairness in the relationship between parties.

The other options do not accurately reflect the role of Equitable Estoppel. For instance, stating that it makes all oral contracts void overlooks the nuanced circumstances where estoppel allows enforcement to prevent injustice. Similarly, suggesting that it allows for breaking contracts without penalties misrepresents its intention, which is to uphold commitments rather than to disregard them. Finally, requiring all contracts to be notar