P. and Son, Limited, entered into a contract with a corporation to construct certain sewage works at a certain price. The engineer of the Corporation prepared plans, which were shown by the Corporation to P. and Son, Limited. These plans misrepresented the state of the locus in an important matter, which materially affected the price agreed upon by P. and Son. The Corporation were not actually aware of the fact that the plans were inaccurate. The contract contained a clause that the contractor was to satisfy himself as to dimensions, levels, and co., and ‘was to obtain his own information on all matters which can in any way influence his tender.’ P. and Son alleged that the misrepresentations in the plans were false and fraudulent, and brought an action against the Corporation for damages for fraudulent misrepresentation.
Held (1) that the clause which provided that the contractors were to satisfy themselves applied only to inaccuracies and errors, and not to fraud, (2) that accordingly P. and Son were entitled to have an opportunity of proving fraud on the part of the engineers, and (3) that if they were successful the Corporation would be liable.
‘It matters not in respect of principal and agent (who represents but one person) which of them possess the guilty knowledge, or which of them makes the incriminating statement. If between them the misrepresentation is made so as to induce the wrong, and thereby damages are caused, it matters not which is the person who makes the representation, or which is the person who has the guilty knowledge.’
Judges:
Lord Chancellor (Loreburn), The Earl of Halsbury, Lords Ashbourne, Macnaghten, James of Hereford, Robertson, Atkinson, and Collins
Citations:
45 SLR 960
Links:
Jurisdiction:
England and Wales
Contract
Updated: 27 April 2022; Ref: scu.622294