• In the case of Oscar Chess Ltd v Williams [1957] 1 WLR 370, the courts ruled on the criteria needed to determine when a representation is an innocent misrepresentation or a warranty or a condition.
  • This contract law case is related to the sale of goods and warranties.

Facts of the Case

  • D sold a motor car to C. The registration book claimed the model of the car is from 1948.
  • C then discovered 8 months later the motor car was actually a 1939 model.
  • C claimed if they had knowledge of the year the car was made then they would have paid less money for it.  C claimed damages for this.

Issues

  • The main question is whether C is entitled to damages after realizing the car was registered in 1939 and not 1948.
  • Is this a collateral warranty, innocent misrepresentation or condition?

Held by Court of Appeal

  • Appeal allowed – D’s offer does not constitute a warranty and D had an honest belief it was a 1948 model so C’s claim failed.

Denning LJ

Definition of warranty

  • A warranty refers to a “binding promise”. The judge defined this using Pasley v Freeman [1789] 3 Term Reports 51.
  • “The question whether a warranty was intended depends on the conduct of the parties, on their words and behaviour, rather than on their thoughts. If an intelligent bystander would reasonably infer that a warranty was intended, that will suffice. And this, when the facts are not in dispute, is a question of law. That is shown by Heilbut, Symons & Co. v. Buckleton [1912] UKHL 2.”

Honest belief

  • D was relying on the information provided in the registration book. An “intelligent bystander” would do the same given the circumstances.
  • C and D made mistakes here however the transaction should be set aside to make up for the loss.

Morris LJ

Representation

  • D’s statement that the model was registered in 1948 was “definite and unqualified statement. It was of this nature because the defendant did not doubt it. It was not a mere expression of tentative or qualified belief”.
  • “The statement that the car was a 1948 car was not a mere representation in respect of the subject-matter of the contract: the statement was adopted as the foundation of the contract that they made.”
  • The statement made by D was not intended to be more than a representation.

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