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Heilbut, Symons & Co v Buckleton, [1913] AC 30

Facts:

P bought shares in what he thought was rubber company. P said induced to buy because of representation

Issue(s):

Can P sue for fraudulent misrepresentation?

Ratio:

*Fraudulent misrepresentation = can recover damages in tort
*Innocent misrepresentation = rescission of contract
**If innocent misrepresentation can be shown to be collateral contract then damages recoverable

*An affirmation at the time of sale is a warranty, provided it appears on evidence to be intended so

Analysis:

Collateral contracts: consideration for the contract was the making of another contract
**Collateral contracts that are to vary or add to the terms of the principal contract are viewed suspiciously – must be proved strictly.

Peek v Derry – 1887
**In order to establish cause of action giving rise to damages for misrepresentation, the statement must be fraudulent or, must be made recklessly, or caring whether it is true or not – intent to deceive.
***Actual fraud essential for a claim of deceit
**The intention of the parties can only be deduced from the totality of the evidence

How do you know if it is a misrepresentation or a warranty?
*The basic test – An affirmation made at the time of sale (contemporaneous with sale) is a warranty provided it was so intended – intention becomes test

Comments:

Introduced the idea of collateral warranty


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