Routledge v McKay [1954] EWCA Civ 8 (10 March 1954)

The seller of a motorcycle incorrectly stated its model year a week before the sale. The subsequent written contract did not include this detail. The court held the statement was an innocent misrepresentation, not a contractual term (warranty).

Facts

The plaintiff, Mr Routledge, purchased a Douglas motorcycle combination from the defendant, Mr McKay. During pre-contractual negotiations on 23rd October 1949, the defendant, relying on information in the motorcycle’s registration book, stated that it was a 1942 model. In fact, the registration book was a replacement and incorrect; the motorcycle was a 1936 model with a sidecar of an even earlier date. One week later, on 30th October 1949, the parties entered into a formal written hire-purchase agreement which made no reference to the year of the model. When the plaintiff discovered the true age of the motorcycle, he brought an action against the defendant for damages, alleging that the statement as to the year constituted a warranty.

Issues

The primary legal issue for the Court of Appeal was whether the defendant’s statement concerning the year of the motorcycle was a term of the contract (a warranty) or merely an innocent misrepresentation made during negotiations that did not form part of the final contract. The court also considered the significance of the contract being reduced to a definitive written document which omitted the statement in question.

Judgment

The Court of Appeal unanimously dismissed the plaintiff’s appeal, affirming the County Court’s decision that the statement was not a warranty but an innocent misrepresentation. The judges provided several reasons for this conclusion.

Reasoning of the Court

Lord Denning drew a critical distinction between a statement that becomes a binding promise (a warranty) and one that is an innocent misrepresentation. He identified several factors to determine the intention of the parties:

1. The time elapsed: The statement was made on 23rd October, but the contract was only finalised in writing on 30th October. Lord Denning reasoned that this interval suggested the statement was part of preliminary negotiations, not a term of the final agreement.
2. Reduction to writing: The agreement was documented in a written hire-purchase contract. The fact that the statement about the year was not included in this written document was strong evidence that the parties did not intend for it to be a contractual term. Lord Denning stated:
   

   If an oral representation is afterwards recorded in writing, it is good evidence that it was intended as a warranty. If it is not put into writing, it is evidence against a warranty being intended.

3. Specialist knowledge: The seller was not a motorcycle expert and was merely passing on information he had found in the registration book, which he honestly believed to be true. He had no personal knowledge from which he could make a binding promise. Lord Denning applied the objective ‘intelligent bystander’ test:
   

   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. Applying that test here, it is plain that the seller, when he stated the year of the motor-cycle, did not mean to bind himself to it as a contractual promise.

Lord Justice Evershed agreed, emphasising that the written contract appeared to be the complete and final record of the agreement. He considered the defendant to be an ‘innocent victim’ of an earlier misrepresentation, just as the plaintiff was. Lord Justice Romer concurred with both judgments.

Implications

The decision in Routledge v McKay is a leading authority on the distinction between contractual terms and mere representations. It clarifies that not every statement made during negotiations will be incorporated as a term of the contract. The case establishes that in determining the parties’ intention, a court will consider factors such as the time lag between the statement and the contract, whether the agreement was reduced to writing (and if the statement was included), and the relative skill and knowledge of the parties. It reinforces the importance of the parol evidence rule, which presumes that a written contract contains the entirety of the agreement, making it difficult to introduce evidence of oral terms that contradict or add to the written document.

Verdict: The appeal was dismissed; the court upheld the finding that the statement was an innocent misrepresentation and not a contractual warranty, meaning the plaintiff’s claim for damages failed.

Source: Routledge v McKay & Ors [1954] EWCA Civ 8 (10 March 1954)