Boris Ignachkov Legal Principles and Key Points
- In the case of Whittington v Seale-Hayne [1900] 82 LT 49, it was held that rescission is the main remedy for misrepresentation although it’s plausible to claim money too so long as it is proportionate to the contractual obligations.
- This contract law case is related to misrepresentation, rescission, covenants and leases.
Facts of the Case
- C and D contracted for a lease used for poultry breeding. The lease contained a covenant stating that there would be repairs.
- C claimed rescission for the unhygienic premises (i.e. contamninated water) and claimed that there were financial losses for the lack of repairs so they were entitled for this breach of contractual obligations.
- C also argued that they should be placed in the same position before contracting.
Issues
- Whether losses incurred because of the contractual obligations.
- Whether damages should be awarded as well as rescission for misrepresentation.
- Whether indemnity should be granted.
Held by High Court
- D is liable – C was awarded an indemnity for the financial losses incurred such as from the rent.
Farwell J
Indemnity
- Indemnity is available as a remedy. There was no fraudulent misstatements made.
- “When the plaintiffs say they are entitled to have the misrepresentations made good, it may mean one of two things. It may mean that they are entitled to have the whole of the injury incurred by their entering into the contract made good, or that they are entitled to be repaid what they have paid under their contract – e.g. to make good in the present case would mean to have the drains put right but to make good by way of compensation for the consequences of the misrepresentations is the same thing as asking for damages”.
- As shown by Derry v Peek [1889] UKHL 1 and Newbigging v Adam [1886] 34 Ch. D. 582, it can only be concluded that C is entitled to what is really damages and that liability for indemnities is limited.
Editor’s Notes
- This case proved that the courts restrict remedies to indemnity claims therefore damages can only be claimed when there is innocent misrepresentation.