Salt v Stratstone Specialist Ltd [2015]

Salt v Stratstone Specialist Ltd [2015] EWCA Civ 745 addressed the issue of whether depreciation in the value of an item involved in a contract would bar the remedy of rescission, especially when compensable. It also delved into the relationship between rescission and damages awarded under Section 2(2) of the Misrepresentation Act 1967 (MA 1967).

The facts involved a purchase where the car dealer represented a sports car as brand new when, in reality, it was not. The buyer discovered defects in the car but only sought to return it after a year. The buyer pursued rescission of the contract and sought damages for misrepresentation.

The Court, as held by Longmore LJ, emphasised that neither the depreciation of the car nor the intermittent enjoyment it provided should prevent the possibility of rescission, as such aspects could be rectified through compensation. Longmore LJ stressed that the burden to establish evidence of depreciation or usage, crucial for obtaining compensation, rested on the representor.

Regarding the lapse of time, the Court ruled that there had not been an unreasonable delay in seeking rescission. The buyer had only discovered the car dealer's misrepresentation during pre-trial disclosure, which justified the timing of the request for rescission.

Longmore LJ highlighted that rescission is the primary remedy for misrepresentation and should be granted if feasible. Furthermore, damages awarded under Section 2(2) of the MA 1967 can only be considered when rescission remains an available remedy. If a bar to rescission applied, it would consequently preclude damages under Section 2(2) of the MA 1967 as well.

The judgment clarified that Section 2(2) of the MA 1967 does not introduce a new remedy but provides the court with discretion to limit the remedy of rescission. This case outlined the intricate relationship between rescission and damages in instances of misrepresentation, emphasising the importance of the availability of rescission for the consideration of damages under the Act.
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