Redgrave v Hurd [1881]

Redgrave v Hurd [1881] 20 Ch D 1 is a significant English contract law case that deals with the issue of misrepresentation. The ruling in this case establishes the principle that a contract can be rescinded for innocent misrepresentation, even if the representee had the opportunity to verify the false statement but chose not to.

Mr Redgrave, an elderly solicitor, advertised for a partner to join his business and purchase the associated house. During an interview with Mr Hurd, he asserted that the practice brought in £300 a year when, in reality, it was only £200 a year. Mr Redgrave presented summaries indicating an average income of £200 a year and claimed that the additional £100 was supported by other papers in the office that Mr Hurd could check. However, these papers, upon inspection, revealed no business. Mr Hurd did not examine the papers until just before the completion of the agreement. Although he had already signed the contract, he refused to proceed, leading Mr Redgrave to sue for specific performance, while Mr Hurd counterclaimed for rescission based on fraudulent misrepresentation.

In the initial judgment, Fry J ruled in favour of Mr Redgrave, holding that since Mr Hurd had not taken the opportunity to check the papers, he could not be considered to have relied on them. However, this decision was appealed. In the Court of Appeal, Sir George Jessel MR, in delivering the judgment on appeal, dismissed Mr Hurd's counterclaim for fraudulent misrepresentation due to the absence of a plea that Mr Redgrave knew his statements were untrue, thus precluding entitlement to damages. Nevertheless, the decision of Fry J was reversed, and the contract was rescinded on grounds of innocent misrepresentation.

Sir George Jessel MR emphasised that for rescission, reliance on the representation was sufficient, and there was no duty on Mr Hurd to inspect the papers. He highlighted the distinction between law and equity, stating that in equity, a person should not be allowed to take advantage of their own false statements. If a material representation induces someone to enter into a contract, it is an inference of law that they were influenced by the representation. Thus, the burden lies with the party alleging otherwise to prove it.

This case stands as a precedent emphasising the significance of reliance on representations in cases of misrepresentation and underscores the equitable principle that one should not benefit from their own false statements.
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