Innocent Misrepresentation CASES

In English law, innocent misrepresentation occurs when a party makes a false statement during contract formation, genuinely believing it to be true, causing the other party to enter the contract.

Definition and Principles

Unlike fraudulent or negligent misrepresentation, innocent misrepresentation involves no fault or negligence—just an honest belief that the representation was accurate.

Remedies

The primary remedy is rescission, allowing the affected party to cancel the contract and restore the parties to their original positions. Damages are not typically awarded for innocent misrepresentation unless provided under specific statutory provisions.

Bars to Rescission

  • Affirmation: Continuing with the contract after discovering the misrepresentation.
  • Delay: Not promptly seeking rescission.
  • Third-party rights: If rights have been acquired by third parties in good faith.

Practical Importance

Understanding innocent misrepresentation encourages transparency in contractual dealings and clarifies available remedies when genuine misunderstandings occur.

Lady justice with law books

Long v Lloyd [1958] EWCA Civ 3 (19 May 1958)

Mr Long purchased a lorry from Mr Lloyd after misrepresentations about its condition, including that it was in first-class condition and could achieve 40mph and 11 miles per gallon. After discovering defects, Long sought rescission. The Court held that even if rescission for innocent misrepresentation survived completion, Long had lost...

Law books in a law library

Bisset v Wilkinson [1926] UKPC 1 (20 July 1926)

Bisset sold land to Wilkinson for sheep farming, stating his opinion that the land could carry 2,000 sheep. The buyers sought rescission for misrepresentation when farming proved unsuccessful. The Privy Council held that the statement was honestly held opinion, not misrepresentation of fact, since neither party knew the land's actual...