Attwood v Small [1838]

Court: House of Lords

Facts: The defendant, Small, sold mines and steelworks to the claimant, Attwood. Small made representations about the capabilities of the property, and Attwood agreed to purchase the property subject to verifying these statements. Attwood's agents conducted the verification and confirmed that Small's representations were accurate. However, it later emerged that these representations were false. Attwood sought rescission of the contract based on the misrepresentations.

Issue: Whether misrepresentations are actionable if the representee independently verifies the accuracy of the representations and the verification does not uncover the misrepresentation.

Held: The House of Lords denied rescission of the contract. The judgment did not provide clear reasoning, but it is commonly interpreted that rescission was denied because Attwood did not rely on the misrepresentations directly. Instead, Attwood relied on its agents to verify Small's representations, and since the agents confirmed the accuracy of the statements, it was deemed that Attwood did not directly rely on the misrepresentations made by Small.

💡 Leveluplaw: underscores that if a representee independently verifies the accuracy of the representations and the verification process does not uncover the misrepresentation, the misrepresentation may not be actionable. This highlights the importance of direct reliance on the misrepresentation itself rather than on the results of an independent verification.