Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd [1965]

Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd [1965] EWCA Civ 2 is an English contract law that centred on the distinction between a representation and a contractual term.

Dick Bentley Productions Ltd sought to purchase a thoroughly examined Bentley. Harold Smith (Motors) Ltd, acting as car dealers, identified a vehicle allegedly having covered only 20,000 miles since a replacement engine had been installed. Subsequently, it was revealed that the Bentley had, in fact, traveled 100,000 miles since the engine and gearbox replacement. Dick Bentley filed a lawsuit against Harold Smith for breach of warranty and secured a favourable judgment at the trial level.

Upon appeal, the Court of Appeal determined that the statement regarding the number of miles covered constituted a term of the contract. This decision hinged on the premise that Harold Smith (Motors) Ltd, being car dealers, possessed superior knowledge compared to the claimant regarding the accuracy of the mileage statement. The court emphasised the significance of the parties' intention to incorporate a term into the contract.

Lord Denning MR, delivering the judgment, discussed the distinction between innocent misrepresentation and warranty. He referred to the principle articulated in Chief Justice Holt's statement that an affirmation at the time of sale is a warranty if it appears to be so intended. Lord Denning explained that the question of intent depends on the conduct of the parties and their words and behaviour, rather than their thoughts.

The judgment outlined the criteria for inferring a warranty, noting that if a representation is made in the course of dealings to induce the other party to enter into the contract and is actually relied upon, that provides prima facie grounds for inferring intent. However, the maker of the representation can rebut this inference by demonstrating that it was an innocent misrepresentation – that he was innocent of fault and it would not be reasonable for him to be bound by it.

In the specific case, it was emphasised that Harold Smith, as a dealer, had the means to verify the history of the car but failed to do so. The court found that his statement about the mileage lacked a reasonable foundation and was not innocently made. Therefore, the inference that it was intended as a warranty was not rebutted, leading to the conclusion that a misrepresentation had occurred, justifying the claimant's right to seek damages.
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