Oscar Chess Ltd v Williams [1957]
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Oscar Chess Ltd v Williams [1957] EWCA Civ 5 is an English contract law case that revolves around whether a representation about a car's model year, made by the seller, should be considered a contractual term or a mere representation.
Williams sold a Morris car to Oscar Chess Ltd for £290, describing it as a 1948 Morris 10. However, the car was, in fact, a 1939 model worth only £175. Williams genuinely believed it was a 1948 model, relying on the car log book, which turned out to be a forgery. In response, Oscar Chess Ltd initiated a claim for breach of contract, contending that the representation regarding the car’s model year was a contractual term of the sale agreement.
The Court of Appeal, in delivering its judgment, rejected the claim brought by Oscar Chess Ltd. The court held that the statement asserting the car to be a 1948 model was not intended to be a term of the contract; instead, it was deemed an innocent representation for which no damages could be awarded.
Denning LJ, in providing the reasoning for the decision, established a test for determining the incorporation of representations as contractual terms. The central question was whether the statement was intended to be a term, with this intention being inferred from the perspective of an objective bystander. Significantly, if the seller, when making a factual statement, explicitly indicated that they possessed no personal knowledge but were conveying information from another source, it was considered challenging to imply a warranty.
In the specific context of this case, Denning LJ highlighted that the car had changed hands multiple times before reaching Oscar Chess Ltd. Both parties were cognisant that the motor dealer had no personal knowledge of the car's model year and was relying on the information contained in the registration book. In light of these circumstances, an intelligent bystander would reasonably conclude that the seller did not intend to bind themselves to a warranty regarding the car's model year.
Denning LJ's reasoning illustrates the significance of clear communication and contextual understanding in determining the nature of a statement – whether it constitutes a contractual term or a non-binding representation. In this instance, the seller's explicit disclaimer of personal knowledge played a pivotal role in shaping the court's view of the statement as a representation rather than a contractual term.
Williams sold a Morris car to Oscar Chess Ltd for £290, describing it as a 1948 Morris 10. However, the car was, in fact, a 1939 model worth only £175. Williams genuinely believed it was a 1948 model, relying on the car log book, which turned out to be a forgery. In response, Oscar Chess Ltd initiated a claim for breach of contract, contending that the representation regarding the car’s model year was a contractual term of the sale agreement.
The Court of Appeal, in delivering its judgment, rejected the claim brought by Oscar Chess Ltd. The court held that the statement asserting the car to be a 1948 model was not intended to be a term of the contract; instead, it was deemed an innocent representation for which no damages could be awarded.
Denning LJ, in providing the reasoning for the decision, established a test for determining the incorporation of representations as contractual terms. The central question was whether the statement was intended to be a term, with this intention being inferred from the perspective of an objective bystander. Significantly, if the seller, when making a factual statement, explicitly indicated that they possessed no personal knowledge but were conveying information from another source, it was considered challenging to imply a warranty.
In the specific context of this case, Denning LJ highlighted that the car had changed hands multiple times before reaching Oscar Chess Ltd. Both parties were cognisant that the motor dealer had no personal knowledge of the car's model year and was relying on the information contained in the registration book. In light of these circumstances, an intelligent bystander would reasonably conclude that the seller did not intend to bind themselves to a warranty regarding the car's model year.
Denning LJ's reasoning illustrates the significance of clear communication and contextual understanding in determining the nature of a statement – whether it constitutes a contractual term or a non-binding representation. In this instance, the seller's explicit disclaimer of personal knowledge played a pivotal role in shaping the court's view of the statement as a representation rather than a contractual term.
