Government of Zanzibar v British Aerospace (Lancaster House) Ltd [2000]

Government of Zanzibar v British Aerospace (Lancaster House) Ltd [2000] EWHC 221 (Comm) revolved around the dispute involving misrepresentation in the context of a contract for the purchase of an executive jet.

The Government of Zanzibar had entered into a contract with British Aerospace through a finance company to purchase the jet. The finance company bought the plane and leased it back to the government. However, the plane had persistent faults, leading to the government ceasing payments under the lease agreement. The government sought to rescind the contract with British Aerospace or, alternatively, claim damages under Section 2(1) or Section 2(2) of the Misrepresentation Act 1967. The government argued that representations were made regarding the airworthiness, reliability, and absence of design or construction defects in the plane.

British Aerospace contended that counter restitution, putting the parties back in their original positions by returning the jet, had become impossible since the finance company had already sold the plane. British Aerospace argued that this barred rescission and, consequently, precluded damages under Section 2(2) if rescission was not possible. Additionally, British Aerospace relied on clause 23 of the sale agreement, stating that the buyer would not rely on the seller's representations, to exclude liability under Section 2(1).

Judge Raymond Jack QC held that the Government of Zanzibar had no right to rescission or damages. Rescission was not possible because the plane had been sold, making counter restitution impossible. As a result, damages under Section 2(2) were not available, as they were dependent on the right to rescission. The judge explained that Section 2(1) provides a right to damages for non-fraudulent misrepresentation, subject to the defence that the representor had reasonable grounds to believe the representation was true. Section 2(2), on the other hand, grants the court the power to award damages when it is more equitable than making an order for rescission or upholding a previous rescission by the act of a party.

Regarding Clause 23, the judge stated that whether it excluded liability under Section 2(1) depended on passing the reasonableness test under Section 3 of the Misrepresentation Act 1967, in conjunction with the Unfair Contract Terms Act 1977 Section 11 and Schedule 2. Although there was insufficient evidence to determine whether the clause passed or failed the reasonableness test, the judge noted that Zanzibar would not necessarily fail in showing that the clause was unreasonable.
Back to blog

UOL Case Bank

Upon joining, you become a valuable UOL student and gain instant access to over 2,100 essential case summaries. UOL Case Bank is constantly expanding. Speed up your revision with us now.

Subscribe Now

Where are our students from?

Council of Europe
Crown Prosecution Service
Baker Mckenzie 
Yale University
University of Chicago
Columbia University
New York University
University of Michigan 
INSEAD
University of London
University College London (UCL)
London School of Economics (LSE)
King’s College London (KCL)
Royal Holloway, University of London 
Birkbeck, University of London
SOAS, University of London
University of Manchester
University of Zurich
University of York
Brandeis University
University of Exeter
University of Sheffield
Boston University
University of Washington
University of Leeds
University of Law
University of Kent
University of Hull
Queen’s University Belfast
Toronto Metropolitan University
Hong Kong University of Science and Technology
University of Buckingham
ESSEC Business School

  • Criminal Practice

    Diagrams and Charts

    Our carefully designed diagrams and charts will guide you through complex legal issues.

  • Criminal Law

    Clear and Succinct Definitions

    Key concepts are concisely defined to help you understand legal topics quickly.

  • Property Law

    Statutory Provisions

    Statutory provisions are provided side by side with legal concepts to help you swiftly locate the relevant legislation.

  • Public Law

    Case Summaries

    We have summarised important cases for you so that you don't need to read long and boring cases.

  • Evidence

    Rules and Exceptions

    Rules and exceptions are clearly listed so that you know when a rule applies and when it doesn't.

  • Company Law

    Terminology

    Legal terms and key concepts are explained at the beginning of each chapter to help you learn efficiently.

  • Case Law

    Case law is provided side by side with legal concepts so that you know how legal principles and precedents were established.

  • Law Exam Guide

    Law Essay Guide

    You will learn essential law exam skills and essay writing techniques that are not taught in class.

  • Law Exam Guide

    Problem Question Guide

    We will show you how to answer problem questions step by step to achieve first-class results.

  • Conflict of Laws

    Structured Explanations

    Complex legal concepts are broken down into concise and digestible bullet point explanations.

  • Legal System and Method

    Legal Research

    You will learn legal research techniques with our study guide and become a proficient legal researcher.

  • Jurisprudence and Legal Theory

    Exam-focused

    All essential concepts, principles, and case law are included so that you can answer exam questions quickly.