In which situation would a party be legally prohibited from denying the existence of a fact?

The correct choice is based on the legal principle of estoppel. Estoppel prevents a party from arguing against or denying a fact that has already been established or accepted in a legal relationship or situation, particularly when that fact has been relied upon by another party. In other words, if one party has made a representation or assumption of fact that another party has relied on to their detriment, the first party is "estopped" from denying that fact later on.

For example, if a landlord represents to a tenant that a certain condition will be maintained in the rental property, and the tenant relies on that representation to their detriment, the landlord may be prevented from later denying that the condition will be maintained. Estoppel is meant to uphold fairness and consistency in legal dealings, ensuring that reliance on stated facts is respected.

In contrast, waiver involves the voluntary relinquishment of a known right, commonly seen in agreements where one party gives up the right to enforce a term of the contract. Fraud pertains to intentional deception made for personal gain, leading to valid legal claims based on intentional misrepresentation. Breach of warranty occurs when a product or service fails to meet a specified condition or quality, which can result in breaches of contract but does not inherently prevent a party