## Facts

- Amalgamated Investments (AI) and Texas Commerce Bank (TCB) entered into a loan agreement secured by shares.
- AI believed the loan was made to a subsidiary of TCB, while TCB treated the loan as involving an independent entity.
- Both parties shared an incorrect belief regarding the borrower's identity.
- The dispute centered on whether this mutual mistake could give rise to estoppel.
- TCB’s conduct throughout the transaction aligned with AI's understanding of the borrower's identity.
- AI acted in reliance on the shared assumption and suffered financial loss as a result.

## Issues

1. Whether a common factual mistake between parties can form the basis for an estoppel claim.
2. Whether conduct, rather than explicit statements, is sufficient to amount to a representation for estoppel.
3. Whether reliance on the mutual mistake by one party, resulting in detriment, enables the application of estoppel.

## Decision

- The Court of Appeal held that a shared but incorrect factual assumption could ground estoppel.
- Lord Denning MR determined that it was unjust for TCB to repudiate the mutual belief about the borrower's identity after AI relied on it.
- The representation giving rise to estoppel may be implied from conduct, not solely express words.
- The court stressed that clear and material loss to the relying party is essential for estoppel to apply.
- The court recognized AI's financial exposure as a sufficient loss stemming from its reliance on the mistaken assumption.

## Legal Principles

- Estoppel prevents a party from denying a stance, whether adopted by words or conduct, on which another has reasonably relied to their detriment.
- A representation for estoppel may be implied from a party’s actions in the context of business dealings.
- For estoppel to arise, there must be demonstration of a definite stance, reasonable reliance, and resulting loss or a change in legal position.
- Shared factual errors, when relied upon and supported by conduct, can establish estoppel even absent explicit statements.

## Conclusion

The decision in Amalgamated Investment Co Ltd v Texas Commerce International Bank Ltd clarifies that estoppel may arise from mutual factual mistakes reflected in parties' conduct, broadening its applicability beyond express representations. The case highlights the necessity of reliance and detriment, supporting estoppel's role in ensuring fairness in contractual relationships.


Amalgamated Investment Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84