In the fast-paced construction industry, on-site realities frequently demand immediate solutions, leading to informal agreements. However, this commercial pragmatism often collides with the machinery of standard form contracts and when disputes occur, parties inevitably retreat to the strict wording of their contracts. A common defence raised by the party who relied on informal agreements is that the other party has either waived their strict contractual rights or is estopped from relying upon them.

At a high level: (i) Waiver involves a party voluntarily abandoning a legal right; and (ii) Estoppel arises when a party is prevented (estopped) from enforcing a legal right because the other party has relied upon a representation to its detriment. However, as one pre-eminent construction legal writer put it: “The legal taxonomy of the principles of law that apply so as to prevent a party from relying upon its “strict” contractual rights, or other rights, or which require it to elect between rights, is by no means precise… There are a number of forms of estoppel, although there is no unanimity as to their nomenclature or operation… “Waiver” is something of a difficult term, in that it can take any one of several meanings.”

Against that backdrop, and the fact there is undoubtedly some overlap between the two, this article attempts to illuminate waiver and estoppel in respect of construction disputes.

Waiver

The law distinguishes waiver primarily into two categories: election and forbearance. Keating summarised waiver as follows: “A party to a contract may act so as to show that it does not intend to enforce a contractual right or require performance of a contractual obligation. It is necessary that such conduct demonstrates a clear and unequivocal representation that its contractual rights would not be enforced. Mere silence in inactivity will rarely suffice. Knowledge or lack of knowledge of the contractual right in question is important. By so acting, it may by waiver lose the right or cease to be entitled to the performance either temporarily or permanently.”

Waiver by Election: a party entitled to alternative, inconsistent rights, acts in a way consistent with having chosen one of them. For example, if an employer has a right to terminate for a specific breach but continues to issue instructions for new work, they may be held to have elected to affirm the contract. In URE Energy Ltd v Notting Hill Genesis [2025] EWCA Civ 1407 the Court held that a party does not waive its contractual right unless it has actual knowledge of that specific contractual right.

There is also the related concept of ‘approbation and reprobation’. In Durtnell & Sons Ltd v Kaduna Ltd [2003] BLR 225, the court observed that: “Redworth cannot blow hot and cold, or approbate and reprobate its earlier argument … The principle is essentially one of estoppel.” At this intersection, it might be said that waiver and estoppel overlap.

Waiver by Forbearance (often elided with promissory estoppel and waiver by estoppel): the promisor leads the other to believe that strict contractual rights will not be insisted upon, with the intention that the promisee should rely on that promise. In Charles Rickards Ltd v Oppenheim [1950] 1 KB 623, Lord Denning found this a temporal state: “Such a waiver is generally suspensory rather than extinctive and can be revoked upon reasonable notice, provided it is not inequitable to do so.”

A critical application of waiver in UK construction law involves challenges to an adjudicator’s jurisdiction. In Bresco Electrical Services Ltd v Michael J Lonsdale (Electrical) Ltd [2019] EWCA Civ 27 at [92] the Court found: “If the responding party wishes to challenge the jurisdiction of the adjudicator then it must do so ‘appropriately and clearly’. If it does not reserve its position effectively and participates in the adjudication, it will be taken to have waived any jurisdictional objection and will be unable to avoid enforcement on jurisdictional grounds.”

Estoppel by Convention (Common Law Estoppel)

Estoppel by convention is perhaps the most frequently invoked form of estoppel in construction disputes, particularly where parties have operated a contract for a long period based on a shared, though potentially erroneous, understanding of its terms. In Mears Ltd v Shoreline Housing Partnership Ltd [2015] EWHC 1396 (TCC), the Court provided a definitive summary of the requirements at [49]:

“(a) An estoppel by convention can arise when parties to a contract act on an assumed state of facts or law… (b) The assumption must be shared by them or at least it must be an assumption made by one party and acquiesced in by the other. The assumption must be communicated between the parties in question. (c) At least the party claiming the benefit of the convention must have relied upon the common assumption, albeit it will almost invariably be the case that both parties will have relied upon it… (d) A key element of an effective estoppel by convention will be unconscionability or unjustness on the part of the person said to be estopped to assert the true legal or factual position.”

Importantly, Akenhead J then went on to say of this ‘unconscionability’: “I am not convinced that “detrimental reliance” represents an exhaustive or limiting requirement of estoppel by convention”. (Note. absent detrimental reliance, there is little separation from other concepts like waiver by forbearance)

Another principle of this estoppel, once a common assumption is revealed to be erroneous, that estoppel ceases to apply to future dealings (Kersfield Developments (Bridge Road Ltd) v Bray & Slaughter Ltd [2017] EWHC 15 (TCC)). That is to say the estoppel would only apply retrospectively and not, for example, to future payment notices.

Examples of Estoppel by Convention

Contract Execution: Estoppel by convention is sometimes argued where parties have performed substantial works without executing the contract. For instance, a party may be estopped from denying that a contract was executed as a deed if they have consistently acted as though it were (DR Jones Yeovil Ltd v Drayton Beaumont Services Ltd [2021] EWHC 1971 (TCC)).

Contractual Entitlement and Conditions Precedent: Further, a party may argue estoppel by convention regarding specific clauses, such as those relating to delay, design responsibility, or a cap on liability, even if the contract suggested otherwise. In Fluor Ltd v Shanghai Zhenhua Heavy Industry Co Ltd [2016] EWHC 2062 (TCC) the court found an estoppel by convention in respect of a liquidated damages claim. (Note. here the Court suggested overlap between estoppel by convention and estoppel by representation, and additionally the author suggests overlap with waiver by forbearance)

Payment Notices: More commonly, the doctrine is frequently raised in disputes concerning the validity of interim payment applications or withholding notices. If parties have established a “course of conduct” by treating procedurally incorrect notices as valid over several payment cycles, they may be estopped from suddenly insisting on strict compliance. For example, in Jawaby Property Investment Ltd v The Interiors Group Ltd [2016] EWHC 557 (TCC), a course of dealing permitting email applications was found sufficient to establish such a convention. In Leeds City Council v Waco UK Ltd [2015] EWHC 1400 (TCC), a course of conduct where the employer accepted interim applications that were a few days late was found to establish an estoppel by convention. However, in Vision Construct Ltd v Gypcraft Drylining Contractors Ltd [2025] EWHC 2707 (TCC), a few late payment applications could easily be attributed to administrative inefficiency or confusion rather than a binding, shared convention.

A recent case on payment notices from the Court of Appeal dealt with both estoppel by convention and waiver, albeit obiter. In A & V Building Solutions Ltd v J & B Hopkins Ltd [2023] EWCA Civ 54 the judge found that “one instance of paying a late payment application is not generally sufficient to amount to a waiver” and that an accepted payment application results in an estoppel.

Estoppel by Representation & Promissory Estoppel (Equitable Estoppel)

Although similar to estoppel by convention, instead of a shared assumption, these types of estoppel relate to a promise or representation. Keating summarised the requirements as follows:“Where a party has made a unequivocal promise or representation to another party that it will not enforce its strict legal rights and the promise or representation is intended to be relied on and is in fact relied on, the first party may be estopped from successfully asserting its strict legal rights if it would be unconscionable or unjust to allow it to do so….The promise need not be supported by consideration, but it must be shown that the promise or assurance had a sufficiently material influence on the other party’s conduct to make in inequitable for the promisor to depart from it.”

By way of example, where an employer has represented that certain works do not need to be performed in order for practical completion to be achieved, the employer may be prevented from later changing its stance and insisting that the relevant outstanding works be completed before practical completion, in circumstances where the contractor would previously have performed those works had the owner not made the representation (Menolly Investments 3 SARL v Cerep SARL [2009] EWHC 516 (Ch)).

Other Considerations

Modern construction contracts often contain ‘no oral modification’ (NOM), ‘non-waiver’, ‘entire agreement’ or ‘no reliance’ clauses. Following Rock Advertising Ltd v MWB Business Exchange Centres Ltd [2018] UKSC 24, NOM clauses are generally enforced to preclude reliance on oral variations. However, the Supreme Court acknowledged that such clauses do not entirely exclude the operation of estoppel if the strict requirements—particularly unconscionability and clear representation—are met. Similarly, non-waiver provisions do not necessarily prevent a party from arguing an estoppel by convention, as the two are distinct legal principles.

Conclusion

Although not entirely clear to define, the doctrines of waiver and estoppel serve as a vital safety valve in English law, preventing the strict application of contract terms from generating commercially unjust results. However, the clear trajectory of the UK courts is a reluctance to imply waivers or estoppels without watertight evidence of knowledge, unequivocal promises, reliance, etc. To navigate the legal minefields, industry professionals should adhere to best practice and fastidiously comply with the contract terms.