Bentley Productions Ltd v Harold Smith PDF

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Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd Appellant – Harold Smith (Motors) Ltd (Defendant) Respondent – Dick Bentley Productions Ltd Court - Court of Appeal

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Judges – Lord Denning, M.R., Danckwerts and Salmon, L.J.J. Date – 3 March 1965

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Facts and Procedural History:

During negotiations for the purchase of a second-hand Bentley car on 23 Jan 1960, the seller (S.) who was in a position to find out the history of that car, said it had done only 20,000 miles since fitted with a replacement engine and gearbox with the speedometer showing a mileage of 20,000.S. After taking it for a short trial run, B. bought and paid £1,850 for the car; he was guaranteed for 12 months. Troubles began almost at once and continued throughout and beyond the guarantee period. After inspection, the statement was proved to be false and the true figure was actually near 100,000, as the seller could have discovered by asking the manufacturer, but he did not do so. In an action by B. claiming damages for breach of warranty as to mileage, S. while admitting the statement as to mileage, claimed that it was made in the belief that it was true, and denied that it was in law a warranty or that B. was induced thereby to buy the car. The county court judge (Herbert given on July 3 1964 at Westminister County Court) held that the representations are untrue and amounted to warranties, awarding damages of £400 as limited to B. S. then appealed and the Court of Appeal gave the same judgment that it was not a mere innocent misrepresentation but a warranty, and the appeal by S was dismissed. 

Judgment – Lord Denning, M.R.

1. Question to law: Whether the representation was an innocent misrepresentation (which does not give rise to damages) or a warranty. 2. “An affirmation at the time of the sale is a warranty, provided it appear on evidence to be so intended.” By Holt, C.J. Whether a warranty was intended depends on the conduct of the parties, on their words and behavior, rather than on their thoughts which are difficult to be proved. 3. If a representation is made during the negotiation for a purpose of inducing the other party to act on it, and it actually induces him to act on it by entering into the contract, this is a ground for inferring that the representation was intended as a warranty.

Additionally, any breach of it will be a breach of warranty and the innocent party will be entitled to claim for damages. 4. Yet, if the maker of the representation can rebut this infer with evidence to show that he honestly believes the representation is true while making it and that it will not be reasonable in the circumstances for him to be bound by it, that will be a mere innocent misrepresentation which does not entitle any damages. 5. S. who was in a position to know, or at least to find out, the history of the car, could get it easily by writing to the manufacturer; however, he did not did so before making that representation which was made beyond his own assumption; he intended and stated it as a fact which a buyer would reasonably act on, so he could not rebut the inference. 6. The representation by the defendant S. was a warranty rather a mere innocent misrepresentation. Salmon, L.J. If what S. said was intended to be understood by B. as a legally binding promise, it was a warranty....