William Sindall plc v Cambridgeshire County Council
Encyclopedia
William Sindall plc v Cambridgeshire County Council [1993] EWCA Civ 14 is an English contract law
case, concerning misrepresentation
. It concerns the exercise of discretion under s 2(2) Misrepresentation Act 1967
.
s. But a private sewer from 20 years before was found after completion. The important point was, however, that after William Sindall plc made the purchase the property market crashed and the value of the land plummeted. William Sindall plc sued for rescission for misrepresentation and common mistake.
For mistake, it was held that the contract allocated risk of unknown sewers to the buyer (now rescission for common mistake is impossible because of The Great Peace).
Hoffmann LJ said that section 2(1) is concerned with the ‘damage flowing from having entered into the contract, while section 2(2) is concerned with damage caused by the property not being what it was represented to be.’ The point of s 2(2) is to have a different effect to s 2(1), so that representors are not unfairly oppressed when someone gets out of a bargain after a little misrepresentation. In this case he would have exercised discretion under s 2(2) so as to prevent William Sindall plc escaping from a bad bargain.
Evans LJ noted the loss would be very great to the Council because now the land was worth a fraction of the purchase price plus interest, as well as it having to repeat the tendering process.
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 concerns the exercise of discretion under s 2(2) Misrepresentation Act 1967
Misrepresentation Act 1967
Misrepresentation Act 1967 is an Act of the Parliament of the United Kingdom, which regulates English contract law and unjust enrichment, so far as relevant for misrepresentations.-Section 1:-Section 2:...
.
Facts
William Sindall plc agreed to buy land from Cambridgeshire County Council after they were told the council were aware of no easementEasement
An easement is a certain right to use the real property of another without possessing it.Easements are helpful for providing pathways across two or more pieces of property or allowing an individual to fish in a privately owned pond...
s. But a private sewer from 20 years before was found after completion. The important point was, however, that after William Sindall plc made the purchase the property market crashed and the value of the land plummeted. William Sindall plc sued for rescission for misrepresentation and common mistake.
For mistake, it was held that the contract allocated risk of unknown sewers to the buyer (now rescission for common mistake is impossible because of The Great Peace).
Judgment
Hoffmann LJ held there was no misrepresentation and no operative mistake. However, had it been necessary for the exercise of discretion under s 2(2) he said that the three factors for deciding what is ‘equitable’ are,- the nature of the misrepresentation; here it was a £5m land sale, but the misrepresentation would only cost £18k to put right
- loss caused were the contract upheld; this is a power to award damages where none were previously recoverable. Because of s 2(3) this is not compensation for the loss, but damages for the misrepresentation as such.
- taking into account that the loss of a bargain was £8m for the council and the ‘gross disparity’ to the loss to Sindall plc he would have exercised his discretion and awarded damages.
Hoffmann LJ said that section 2(1) is concerned with the ‘damage flowing from having entered into the contract, while section 2(2) is concerned with damage caused by the property not being what it was represented to be.’ The point of s 2(2) is to have a different effect to s 2(1), so that representors are not unfairly oppressed when someone gets out of a bargain after a little misrepresentation. In this case he would have exercised discretion under s 2(2) so as to prevent William Sindall plc escaping from a bad bargain.
Evans LJ noted the loss would be very great to the Council because now the land was worth a fraction of the purchase price plus interest, as well as it having to repeat the tendering process.
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...