Thomas Witter Ltd v TBP Industries [1996]
Share
Thomas Witter Ltd v TBP Industries [1996] 2 All ER 573 centred around misrepresentation in the context of the sale of a carpet company. The defendant, TBP Industries, negotiated the sale of the carpet company to the plaintiff, Thomas Witter Ltd, in December 1989. During the negotiations, TBP Industries negligently misrepresented that there was a special one-off expense of GBP 120,000 in the produced accounts, and that the accounts spread the bi-annual expense of producing pattern books over two years instead of immediately writing it off.
The sale contract included a provision where Thomas Witter Ltd acknowledged that it had not been induced to enter into the agreement by any representation or warranty. Additionally, there was a contractual limitation clause stipulating that TBP Industries would not be liable for a breach of the agreement unless written notice was given by January 1, 1992. When Thomas Witter Ltd sued for negligent misrepresentation, TBP Industries sought to rely on these contractual provisions.
In his judgment, Jacob J considered the availability of rescission when it was impossible to restore the parties to their positions before the contract. Jacob J acknowledged that rescission was no longer available in such cases. However, he referred to the Solicitor General's remarks during the passing of the Misrepresentation Act, stating that damages could be awarded even when rescission was no longer feasible.
Jacob J clarified that under Section 2(2) of the Misrepresentation Act, the right to damages did not depend on the concurrent right to rescission. It was sufficient that the right to rescind had existed in the past, even if it was presently barred due to impossibility of restoration. This interpretation emphasised the availability of damages as a remedy for misrepresentation, even in situations where rescission was no longer practical.
It is worth noting that doubt has been cast on the availability of rescission in subsequent cases, such as Floods of Queensferry Ltd v Shand Construction Ltd [2002] and Government of Zanzibar v British Aerospace (Lancaster House) Ltd [2000]. The legal landscape surrounding the interplay of rescission and damages in misrepresentation cases has evolved, and subsequent cases have influenced the understanding of the principles laid out in Thomas Witter Ltd v TBP Industries.
The sale contract included a provision where Thomas Witter Ltd acknowledged that it had not been induced to enter into the agreement by any representation or warranty. Additionally, there was a contractual limitation clause stipulating that TBP Industries would not be liable for a breach of the agreement unless written notice was given by January 1, 1992. When Thomas Witter Ltd sued for negligent misrepresentation, TBP Industries sought to rely on these contractual provisions.
In his judgment, Jacob J considered the availability of rescission when it was impossible to restore the parties to their positions before the contract. Jacob J acknowledged that rescission was no longer available in such cases. However, he referred to the Solicitor General's remarks during the passing of the Misrepresentation Act, stating that damages could be awarded even when rescission was no longer feasible.
Jacob J clarified that under Section 2(2) of the Misrepresentation Act, the right to damages did not depend on the concurrent right to rescission. It was sufficient that the right to rescind had existed in the past, even if it was presently barred due to impossibility of restoration. This interpretation emphasised the availability of damages as a remedy for misrepresentation, even in situations where rescission was no longer practical.
It is worth noting that doubt has been cast on the availability of rescission in subsequent cases, such as Floods of Queensferry Ltd v Shand Construction Ltd [2002] and Government of Zanzibar v British Aerospace (Lancaster House) Ltd [2000]. The legal landscape surrounding the interplay of rescission and damages in misrepresentation cases has evolved, and subsequent cases have influenced the understanding of the principles laid out in Thomas Witter Ltd v TBP Industries.
