Boris Ignachkov Legal Principles and Key Points
- In the case of Walker v Boyle [1982] 1 All ER 634, the court held clauses of common use can also be found unreasonable.
- This contract law case is about misrepresentation and rescission.
- This case determines whether contractual liability can be excluded according to s 3 of the Misrepresentation Act 1967.
Facts of the Case
- C and D contracted for a house. The contract on the sale of property contained a clause stating: “no error, misstatement or omission in any preliminary answer concerning the property shall annul the sale”.
- D was unaware that a fence was removed after conflict over the property’s northern boundary. D refused to complete the contractual obligations.
- C contended that under condition 17(1) of the Conditions of Sale, the clause was reasonable. D contended the contract should be rescinded on the grounds of innocent misrepresentation.
Issues
- The main question is whether the clause excludes innocent misrepresentation or not.
- Did misrepresentation induce Mr Walker into the contract?
- Does the condition prevent contract rescission?
- Should the deposit money be returned?
Held by High Court
- D is liable – C can claim damages for innocent misrepresentation since D had knowledge of the actual facts and therefore could not rely on this condition.
Dillon J
Misrepresentation
- “The object of a purchaser in making preliminary inquiries is to obtain information on which the purchaser can decide whether to proceed to exchange contracts. Any vendor will know that that is the object of asking the questions, and will know that the answers are likely to be relied upon. A person who makes a representation of fact cannot negative the representation by words such as those in the small print which I have quoted. I accordingly ignore those words.”
- The dispute regarding the boundary should have been disclosed prior to contract formation thus there was a misrepresentation made. Mr Walker would not have contracted otherwise.
- The judge cited Nottingham Patent Brick and Tile Co. v. Butler [1885] 15 Q.B.D. 261 where it was held withholding half of the facts also constitutes as false statements, and Charles Hunt Ltd. v. Palmer [1931] 2 Ch. 287 to conclude failing to disclose overrides the conditions of sale.
- The misrepresentation was not made fraudulently.
Specific performance
- “It seems to me that the equitable barrier to specific performance extends not merely to matters of title where the vendor has failed to disclose defects known to him in his own title, but also to misrepresentation where the vendor has, albeit innocently, misdescribed the property or made some other misrepresentation about the property, when the true facts were within his own knowledge. A trifling misrepresentation where the truth would have had no effect on the purchaser and the purchaser would have nonetheless entered into the contract, rests in a different category, because there the contract has not been induced by the misrepresentation, but here, as I find, the purchaser would reasonably have refused to contract unless the boundary dispute, if disclosed to him, had first been resolved”.
