Smith v Land House Property Corporation [1884]

Court: Court of Appeal

Facts: Land House Property Corporation entered into a contract with Smith to sell a hotel. In the advertisement, Smith described the current tenant, Fleck, as a "most desirable tenant." However, Fleck was actually six months behind on his rent and later went bankrupt. Land House Property Corporation refused to complete the transaction, leading Smith to seek specific performance of the contract.

Issue: Whether Smith's description of Fleck as a "most desirable tenant" constituted a statement of fact or opinion, and whether it could lead to the rescission of the contract for misrepresentation.

Held: The Court of Appeal held that Smith’s claim for specific performance was denied as the contract was rescinded for misrepresentation. Bowen LJ noted that statements of opinion can be considered statements of fact if the facts are not equally known to both parties and the person expressing the opinion has superior knowledge.

Key Judicial Statements - Bowen LJ: Where the facts are not equally known, then a statement of opinion by the one who knows the facts best involves often a statement of fact, for he impliedly states that he knows facts which justify his opinion. In this case, Smith’s opinion about the tenant was based on facts he knew but which were not known to Land House Property Corporation.

💡 Leveluplaw: highlights that statements of opinion can be actionable as statements of fact if the person expressing the opinion has superior knowledge and the facts are not equally known to the other party.