Clarke v Dickson EB & E 148 is an English contract law

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 stands as an example of the restrictive approach common law courts took to rescission for misrepresentation before the leading case of Erlanger v New Sombrero Phosphate Co

Erlanger v New Sombrero Phosphate Co

Erlanger v New Sombrero Phosphate Co 3 App Cas 1218 is a landmark English contract law, restitution and UK company law case. It concerned rescission for misrepresentation and how the impossibility of counter restitution may be a bar to rescission...

held only substantial counter restitution was needed.

Facts

Mr Clarke said he was induced by the three defendants’ statements to take shares in The Welsh Potosi Lead and Copper Mining Company, formed for working on a mine on the cost-book principle. Dividends were declared in 1854-6. Then Mr Clarke accepted fresh allotments in lieu of dividends. In 1857 the company's performance was poor and it was liquidated under the Winding-up Act 1855. Then Mr Clarke discovered that the representations about its cost-book practices were false and fraudulent. He sued to recover deposits for the shares.

Judgment

Crompton J held that the contract could not be rescinded, since the shares were now worth less. He said where someone wants to exercise the voidable option,
Erle J and Lord Campbell CJ concurred.