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Bisset v Wilkinson [1927] AC 177 Whether a statement is one of fact or opinion for the purposes of rescinding a contract Facts The defendant in this matter was the purchaser of land in New Zealand which was purchased by the claimant for the purpose of sheep farming. The appeal, to which this judgment relates, is on the defendant’s counterclaim. During the purchase process, the claimant informed the defendant that the land being purchased was capable of sustaining 2000 sheep. However, after the purchase the defendant discovered that this was only possible if very careful land management was carried out, and that the land as it stood could not sustain this number of sheep. The defendant therefore sought to rescind the contract on the basis that the claimant’s statement was a misrepresentation. Issue The issue in this circumstance was whether the statement made by the claimant could be considered a statement of fact in terms of being a representation, or whether it was simply an opinion held by the claimant. Held It was held that the claimant’s statement was nothing more than an opinion as to the capacity of the land, based on the claimant’s knowledge of farming, together with the defendant’s knowledge of the current stock. The statement was not therefore held to be a representation. In any event, the defendant had not been able to demonstrate that the land was not capable of carrying the 2000 sheep that the claimant had stated, and therefore the claimant’s appeal was allowed, and the contract could not be rescinded.

Spice Girls Ltd v Aprilia World Service (2002) EWCA Civ 15 All RE 195 The claimants worked together as a five-girl pop group. The defendants had signed a sponsorship agreement, but now resisted payment saying that one of the five, Geri, had given notice to leave the group, substantially changing what had been promised. The girls acknowledged that Geri had said she would leave but insisted that no real intention to leave had existed. Held: Generally, a person who is about to enter into an agreement is under no duty to disclose material facts which he knows but which the other party does not know. Here the group knew that the other party was relying upon a representation and could not discharge the

requirement to show that they did not know of its falsity and were liable in damages to the defendant. Esso Petroleum v Mardon [1976] QB 801. DUTY OF CARE – MISREPRESENTATION Facts The plaintiff, Mr Mardon, entered into a tenancy agreement with the defendant, Esso Petroleum, in respect of a petrol station owned by the latter. During the negotiation of the agreement, ‘expert’ advisers employed by the defendant had provided an estimate of the sales which the petrol station could expect which was based on inaccurate information and consequently was significantly inflated. The value of the rent on the agreement had been calculated based on this inflated figure. As a result, it was impossible for the plaintiff to operate the petrol station profitably. Issue The issues were: firstly, whether the plaintiff could have any action for misrepresentation given that the figure purported to be an ‘estimate’ rather than a statement of fact; secondly, whether the defendant owed any duty of care to the plaintiff so that he could bring his claim in the tort of negligence. Held The Court of Appeal held that the contract could not be voided for misrepresentation as the defendants presented the inflated figure as an estimate rather than as a hard fact. On the other hand, as the defendant had taken it upon themselves to employ experts for the purpose of providing an estimate of sales, they owed a duty of care to the plaintiff to ensure that this was done on the basis of accurate information. The plaintiff was therefore able to recover the losses which he had suffered as a result of the defendant’s negligent misstatement.

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