Thomas Witter v TBP Industries Ltd: ChD 15 Jul 1994

An award of damages for misrepresentation required that there had at some time been a right of rescission, not necessarily a continuing right to rescind.
An acknowledgement of non-reliance clause has become a common part of modern commercial contracts. An entire agreement clause limits the terms of the parties’ agreement to their written agreement and prevents a representation from assuming contractual force, but that it does not, without more, preclude or exclude liability for misrepresentation. As to the clause under which a party acknowledged that he had not been induced to enter the subject agreement by any representation, save those specified in a schedule.
Discussing the clause at issue, Jacob J said: ‘The problem is its scope. The Act of 1967 calls for consideration of the term as such. And it refers to ‘any liability’ and ‘any misrepresentation’. It does not call for consideration of the term so far as it applies to the misrepresentation in question or the kind of misrepresentation in question. The term is not severable: it is either reasonable as a whole or not. So one must consider its every potential effect. The clause does not seek to distinguish between fraudulent, negligent, or innocent misrepresentation. If it excludes liability for one kind of misrepresentation it does so for all. I cannot think it reasonable to exclude liability for fraudulent misrepresentation . . It may well be, with a different clause, reasonable to exclude liability for innocent misrepresentation or even negligent misrepresentation. But since the width of this clause is too great I would have held it failed the requirement of reasonableness and was of no effect.
A possible route round this latter objection would be to construe the clause so that it did not apply to a fraudulent misrepresentation. This approach is artificial. It is unnecessary now that the 1977 Act exists to destroy unreasonable exclusion clauses. The construction involves creating an implied exception in the case of fraud. What about an implied exclusion of negligence? Or gross negligence? It is not for the law to fudge a way for an exclusion to be valid. If a party wants to exclude liability for certain sorts of misrepresentation, it must spell those out clearly’.
Jacob J
Ind Summary 08-Aug-1994, [1996] 2 All ER 573
Misrepresentation Act 1967
England and Wales
Cited by:
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These lists may be incomplete.
Updated: 05 May 2021; Ref: scu.185981