In 1900 a railway company issued tenders for the formation of a railway line, and in September a contract was arranged with a firm of contractors, the payment to be a stipulated lump sum. The specification included this stipulation-‘ Cuttings and Embankments.-Bores have been put down at various parts of the line, the positions of which are shown on the small scale plan, and a copy of the journals of these bores may be seen at the engineer’s office, but the company does not in any way guarantee their accuracy, or that they will be a guide to the nature of the surrounding strata. Contractors must therefore satisfy themselves as to the nature of the strata, as the company will not hold themselves liable for any claim that may be made against them on account of any inaccuracy in the journals of the bores. . . Of the probability of rock existing in any of the cuttings or other excavations to a greater extent than the quantity given in the detailed schedule, the contractor must judge, and also form his own opinion as to the nature of the strata, of the material in the various cuttings or excavations and in the base of the embankments, and price the quantities in the detailed schedule accordingly, as no allowance whatever will be made over the lump sum in the detailed schedule for these, although the material may turn out to be different from what is calculated and given in the detailed schedule.’ By the end of 1902 the contractors were aware that the material they had to deal with was very different from and more costly to treat than what they had expected and they complained-the company in fact paid them pounds 10,000 over the stipulated amount, half then and half later. The contractors continued the work, however, and completed it by May 1905. In November 1907 they proceeded to bring an action against the company, and in preparation therefor became aware that of sixty-five bores eighteen had not been made by professional borers but by employees of the company, and that in the journals four of these were not, as returned, by such employees but as edited by the company’s engineer, he having entered what he honestly believed must be meant. The engineer had also omitted four check bores which had also been put down by such employees.
Held ( rev. judgment of the Second Division) (1) that the contractors were not in a position to demand rescission of the contract, restitutio in integrum being a condition of such a remedy and being here impossible; (2) that there was no misrepresentation in the journals of the bores shown being as edited by the engineer and not the actual returns made by the men boring, what the specification contemplated being the product of the responsible officer of the company, the engineer, and he having acted honestly; (3) that even if there had been shown to have been innocent misrepresentation it was not proved to be in essentialibus inducing to the contract; (4) that the contractors could not now be heard, in the absence of fraud, on the disconformity of the material they had had to treat with what they had expected, they having after acquiring full knowledge thereof elected to proceed with the work and completed the contract.
Judges:
Earl Loreburn, Lord Atkinson, Lord Shaw, and Lord Parmoor
Citations:
[1915] UKHL 205, 52 SLR 205
Links:
Jurisdiction:
England and Wales
Contract
Updated: 26 April 2022; Ref: scu.620672