Refusal to apply the estoppel principle in cases of mistake in the formation of a banking or investment contract established in the judgments of the Supreme Court rendered on December 17th 2015, February 3rd 2016, March 16th 2016, as well as other case law rendered on this matter

Abstract

Banks frequently allege the estoppel principle or the implied acknowledgement in disputes in which clients file actions of mistake in the formation of the contract. The majority of the scholars and the case law from Provincial Courts generaüy affirms that the said principle cannot be applied since on the one hand clients are not aware of the supposed mistake, and on the other hand, there are not undoubtful acts that confirm the contract. But some judgments rendered by Provincial Courts have considered that this principle should be applied under certain circumstances such as having suffered negative results for some time, not having claimed against the contract or having acquired the same product several times. These facts were not deemed sufficient by the majority of the scholars and the case law from Provincial Courts to apply the said principle.  This debate seems to be overcome by the recent case law from the Spanish Supreme Court studied in this article, which affirms that entering into similar contracts, written warnings about a generic risk of the investment product or even suffering negative results for a while do not support the application of the estoppel principle.