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Esso Petroleum Co Ltd v Mardon [1976] QB 801

Facts:

Owner of petrol station told tenant that it would sell an estimated 200,000 gallons. Then after, planning permissions changed, affecting station exposure; sales were seen to be much less.
Tenant stopped paying for petrol provided.
Owner sued for reposession. Tenant countersued for breach of warranty, and for negligent misrepresentation.

Ratio:

A statement as to the future is not a statement of fact and cannot amount to a misrepresentation.

A party's relative expertise compared to the other party must be deemed to have warranted a forecast was made with reasonable care and skill, as the statement induced the contract.

Analysis:

(1) Statement as to potential was a contractual warranty for it was a factual statement on a crucial matter made by a party who had, or professed to have, special knowledge with the intention of inducing the other party to enter into the contract of tenancy. That it did induce D to enter contract.
C was in breach of the warranty + liable in damages for the breach.

(2) Statement was a negligent representation. C holding himself out as having special expertise in circumstances --> duty to take reasonable care (DoC) to see that the representation was correct; DoC existed during the pre-contract negotiations and survived the making of the written contract.
C was liable for damages for the tort of negligence.

Holding:

Court of Appeal:
Appeal allowed for Defendant:

The statement was not a misrepresentation.
The statement was a contractual term (breach of warranty of a collateral contract) or negligent misstatement.


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