Redgrave v Hurd - AbsoluteAstronomy.com

Redgrave v Hurd 20 Ch D 1 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 It holds that a contract can be rescinded for innocent misrepresentation, even where the representee also had the chance to verify the false statement.

Facts

Mr Redgrave, an elderly solicitor, advertised for a partner to join the business and buy the accompanying house. He said in an interview with Mr Hurd that the practice brought in £300 pa, when it was only £200 pa. Mr Redgrave showed him summaries that came to a £200 pa average income and said that the rest of the £300 figure was borne out by other papers in the office that he could check (in fact they showed no business). Mr Hurd did not inspect the papers, until he realised the truth just before completion of the agreement. He had signed the contract but he refused to go through. Mr Redgrave sued for specific performance

Specific performance

Specific performance is an order of a court which requires a party to perform a specific act, usually what is stated in a contract. It is an alternative to award/ for awarding damages, and is classed as an equitable remedy commonly used in the form of injunctive relief concerning confidential...

and Mr Hurd counterclaimed for rescission based on fraudulent misrepresentation.

Fry J held that because Mr Hurd had not taken the opportunity to check through the papers, he could not be taken to have relied on them. Mr Hurd appealed.

Judgment

Sir George Jessel MR held that Mr Hurd’s counterclaim for fraudulent misrepresentation failed because there was no plea that Mr Redgrave knew his statements were untrue. Therefore there was no entitlement to damages. Nevertheless, Fry J’s decision was reversed, and the contract was rescinded on grounds of innocent misrepresentation. He held that relying on the representation was enough and there was no duty to inspect the papers. For rescission, he noted the difference of law (knowledge was necessary) and equity, where the approach was ‘A man is not to be allowed to say… that when he made it he did not know it to be false; he ought to have found that out before he made it’ and ‘no man ought to seek to take advantage of his own false statements’. If a man is induced to enter a contract by a false representation it is not a sufficient answer to him to say, ‘If you had used due diligence you would have found out that the statement was untrue. You had the means afforded you of discovering its falsity, and did not choose to avail yourself of them... If it is a material representation calculated to induce him to enter into the contract, it is an inference of law that he was induced by the representation to enter into it’ and so it is for the person alleging otherwise to show it.

Baggallay LJ and Lush LJ concurred.

Facts

Judgment

See also