Redgrave v Hurd [1881]

Court: Court of Appeal

Facts: Mr. Redgrave, an elderly solicitor, advertised for a partner to join his practice and purchase the associated house. During negotiations, Mr. Redgrave claimed the practice generated £300 annually, but it was actually only £200. Redgrave provided summaries showing £200 income and claimed that an additional £100 could be verified from other papers in the office. Mr. Hurd, the prospective partner, did not inspect these papers until just before the contract completion. After signing the contract, Mr. Hurd refused to proceed, citing the misrepresentation as grounds for rescission. Mr. Redgrave sued for specific performance, and Mr. Hurd counterclaimed for rescission based on fraudulent misrepresentation.

Issue: Can a contract be rescinded for innocent misrepresentation if the representee had the opportunity to verify the false statement but chose not to?

Held: The Court of Appeal ruled that the contract could be rescinded based on innocent misrepresentation. Sir George Jessel MR stated that reliance on the misrepresentation was sufficient for rescission, and Mr. Hurd was not obligated to inspect the papers. The court emphasized that a material misrepresentation, even if the representee had the opportunity to check, could still lead to rescission of the contract.

Key Judicial Statement: Sir George Jessel MR observed, "In equity, a person should not be allowed to take advantage of their own false statements. If a material representation induces someone to enter into a contract, it is an inference of law that they were influenced by the representation."

💡Leveluplaw: For rescission of a contract based on misrepresentation, it is sufficient that the representee relied on the false statement. There is no obligation to verify the accuracy of the representation, and the misrepresentation need not be fraudulent to warrant rescission.