Redgrave v Hurd (1881) 20 Ch D 1
Contract law – Misrepresentation – Specific performance
The plaintiff was a solicitor who constructed an advertisement titled ‘Law Partnership’ where he sought a successor who he would take as a Partner on the basis that the individual purchased the plaintiff’s property. The defendant responded and was interviewed at which point he was informed the business was worth £300 per year. The defendant then wrote to the solicitor asking the amount of business completed in the last three years. The plaintiff showed documentation showing almost £200 per year and offered the defendant the opportunity to assess the accounts. The defendant subsequently agreed to purchase the property but having placed a deposit on the property and taking possession, he found the business was actually worthless and refused to complete the remainder of the agreement. The plaintiff appealed for specific performance. The judge in the first instance found in favour of the plaintiff and the decision was appealed.
A matter for the court was to establish the extent of the misrepresentation of the plaintiff and whether the defendant should have been expected to undertake further research into the proposed business by having a look at the accounts which had been presented by the plaintiff.
The court reversed the decision of the trial judge and they allowed the contract to be rescinded on the basis of innocent misrepresentation. It is important to note that the court did not find fraudulent misrepresentation. The court found that the defendant was not under a duty to inspect the papers and that his reliance on the plaintiff’s misrepresentation was enough.