Edgington v Fitzmaurice
A misstatement of present intention is a misrepresentation of fact, and it need not be the only reason the claimant entered the contract.
Facts
The directors of the Army and Navy Provision Market issued a prospectus inviting the public to subscribe for debentures. The prospectus stated that the money raised would be used to complete alterations to the company's buildings, to buy horses and vans and to develop the trade in fish. In reality, the directors intended to use the money to pay off the company's pressing liabilities. Mr Edgington subscribed for debentures, partly in reliance on the prospectus and partly because he mistakenly believed that the debentures would give him a charge over the company's property. The company became insolvent, and Mr Edgington sued the directors in deceit.
Legal principle
The Court of Appeal held that the directors were liable in deceit. Bowen LJ said that the state of a man's mind is as much a fact as the state of his digestion. A statement of present intention is therefore a statement of fact, and it is a misrepresentation if the person making it does not actually have that intention. It did not matter that Mr Edgington was also influenced by his own mistake about the security, because a misrepresentation need not be the sole cause of the claimant entering the contract, as long as it materially influenced his decision.
Related cases on misrepresentation
- Attwood v Small (1838) 6 Cl & F 232
- Bisset v Wilkinson [1927] AC 177
- Car and Universal Finance Co Ltd v Caldwell [1965] 1 QB 525
- Derry v Peek (1889) 14 App Cas 337
- Dimmock v Hallett (1866) LR 2 Ch App 21
- Esso Petroleum Co Ltd v Mardon [1976] QB 801
- Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465
- Howard Marine & Dredging Co Ltd v A Ogden & Sons (Excavations) Ltd [1978] QB 574
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