Edgington v Fitzmaurice
Encyclopedia
Edgington v Fitzmaurice 29 Ch D 459 is an English contract law
case, concerning misrepresentation
. It holds that a statement of present intentions can count as an actionable misrepresentation and that a misrepresentation need not be the sole cause of entering a contract so long as it is an influence.
To fulfil the requirement that Mr Edgington relied on the statement, it is not necessary to show the misstatement was the sole cause of acting, so long as there was an influence.
Bowen LJ said ‘the state of a man’s mind is as much a fact as the state of his digestion… A misrepresentation as to the state of a man’s mind is, therefore, a misstatement of fact... such misstatement was material if it was actively present to his mind when he decided to advance his money.’
Fry LJ said the ‘inquiry is whether this statement materially affected the conduct of the Plaintiff in advancing his money.’ He pointed out the ‘prospectus was intended to influence the mind of the reader.’
English contract law
English contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...
case, concerning misrepresentation
Misrepresentation in English law
Misrepresentation in English law is an area of English contract law, which allows a person to escape a contractual obligation or claim compensation for losses. If one person can show that she entered an agreement because of another person's false assurances, then the other person will be unable to...
. It holds that a statement of present intentions can count as an actionable misrepresentation and that a misrepresentation need not be the sole cause of entering a contract so long as it is an influence.
Facts
Company directors sent shareholders a prospectus inviting subscriptions for debenture bonds. It said money would go to alter their buildings, buy horses, vans and expand into supplying fish. Really though, the purpose was to pay off liabilities, because the company was in trouble. Mistakenly believing he would get a first charge on company property, Mr Edgington bought bonds. He would have bought them anyway, had he known he would have no charge. Mr Edgington sought to recover money for deceit.Judgment
The Court of Appeal upheld Denman J at first instance, saying that the directors liable for deceit. Cotton LJ held that the statement of purpose was a fraudulent misrepresentation and Mr Edgington had relied on that despite his admission of mistake over charges. He said,To fulfil the requirement that Mr Edgington relied on the statement, it is not necessary to show the misstatement was the sole cause of acting, so long as there was an influence.
Bowen LJ said ‘the state of a man’s mind is as much a fact as the state of his digestion… A misrepresentation as to the state of a man’s mind is, therefore, a misstatement of fact... such misstatement was material if it was actively present to his mind when he decided to advance his money.’
Fry LJ said the ‘inquiry is whether this statement materially affected the conduct of the Plaintiff in advancing his money.’ He pointed out the ‘prospectus was intended to influence the mind of the reader.’
See also
- English contract lawEnglish contract lawEnglish contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...
- Misrepresentation in English lawMisrepresentation in English lawMisrepresentation in English law is an area of English contract law, which allows a person to escape a contractual obligation or claim compensation for losses. If one person can show that she entered an agreement because of another person's false assurances, then the other person will be unable to...