| Leaf v International Galleries | |
|---|---|
 | |
| Court | Court of Appeal |
| Citation(s) | [1950] 2 KB 86 |
| Court membership | |
| Judge(s) sitting | Denning LJ, Jenkins LJ and Lord Evershed MR |
| Case opinions | |
| Denning LJ, Jenkins LJ and Lord Evershed MR | |
| Keywords | |
| innocent misrepresentation, mistake, rescission | |
Leaf v International Galleries [1950] 2 KB 86 is an English contract law case concerning misrepresentation, mistake and breach of contract, and the limits to the equitable remedy of rescission.
Salisbury Cathedral by John Constable was what Ernest Louis Leaf thought he was buying on 8 March 1944 from International Galleries. International Galleries said it was a Constable. Leaf paid £85. Five years later when he tried to auction it, Leaf was told that it was not a Constable. He claimed rescission of the contract against International Galleries, to get back his money.
Denning LJ held that Mr Leaf was barred because too much time had lapsed. He held that in the event of lapse of too much time between the making of the contract and the decision to rescind, the right to rescind is lost. He held there was a mistake about the quality of the subject matter because both parties believed the picture to be a Constable, and that mistake was fundamental. But it was not enough to void the contract, because there was no mistake about the essential subject matter (a painting). The painter's identity was a term of the contract, which could either be classified as a condition (breach of which allows termination of the contract) or a warranty (which allows damages only). Here the painter's identity was a condition, but after hanging it in one's house for five years it is far too late to reject the painting for breach of condition.
The question is whether the plaintiff is entitled to rescind the contract on the ground that the painting in question was not painted by Constable. I emphasize that it is a claim to rescind only: there is no claim in this action for damages for breach of condition or breach of warranty. The claim is simply one for rescission. At a very late stage before the county court judge counsel did ask for leave to amend by claiming damages for breach of warranty, but it was not allowed. No claim for damages is before us at all. The only question is whether the plaintiff is entitled to rescind.
The way in which the case is put by Mr. Weitzman, on behalf of the plaintiff, is this: he says that this was an innocent misrepresentation and that in equity he is, or should be, entitled to claim rescission even of an executed contract of sale on that account. He points out that the judge has found that it is quite possible to restore the parties to their original position. It can be done by simply handing back the picture to the defendants.
In my opinion, this case is to be decided according to the well known principles applicable to the sale of goods. This was a contract for the sale of goods. There was a mistake about the quality of the subject-matter, because both parties believed the picture to be a Constable; and that mistake was in one sense essential or fundamental. But such a mistake does not avoid the contract: there was no mistake at all about the subject-matter of the sale. It was a specific picture, "Salisbury Cathedral." The parties were agreed in the same terms on the same subject-matter, and that is sufficient to make a contract: see Solle v Butcher . [1] [2]
There was a term in the contract as to the quality of the subject-matter: namely, as to the person by whom the picture was painted – that it was by Constable. That term of the contract was, according to our terminology, either a condition or a warranty. If it was a condition, the buyer could reject the picture for breach of the condition at any time before he accepted it, or is deemed to have accepted it; whereas, if it was only a warranty, he could not reject it at all but was confined to a claim for damages.
I think it right to assume in the buyer's favour that this term was a condition, and that, if he had come in proper time he could have rejected the picture; but the right to reject for breach of condition has always been limited by the rule that, once the buyer has accepted, or is deemed to have accepted, the goods in performance of the contract, then he cannot thereafter reject, but is relegated to his claim for damages: see s. 11, sub-s. 1 (c), of the Sale of Goods Act 1893, and Wallis, Son & Wells v Pratt & Haynes. [3]
The circumstances in which a buyer is deemed to have accepted goods in performance of the contract are set out in s. 35 of the Act, which says that the buyer is deemed to have accepted the goods, amongst other things, "when, after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them." In this case the buyer took the picture into his house and, apparently, hung it there, and five years passed before he intimated any rejection at all. That, I need hardly say, is much more than a reasonable time. It is far too late for him at the end of five years to reject this picture for breach of any condition. His remedy after that length of time is for damages only, a claim which he has not brought before the court.
Is it to be said that the buyer is in any better position by relying on the representation, not as a condition, but as an innocent misrepresentation? I agree that on a contract for the sale of goods an innocent material misrepresentation may, in a proper case, be a ground for rescission even after the contract has been executed...
Although rescission may in some cases be a proper remedy, it is to be remembered that an innocent misrepresentation is much less potent than a breach of condition; and a claim to rescission for innocent misrepresentation must at any rate be barred when a right to reject for breach of condition is barred. A condition is a term of the contract of a most material character, and if a claim to reject on that account is barred, it seems to me a fortiori that a claim to rescission on the ground of innocent misrepresentation is also barred.
Jenkins LJ and Lord Evershed MR concurred.
In essence, the court held that there was no breach of contract, no "operative mistake", but there WAS misrepresentation. However, after a period of five years the right to rescission had lapsed, leaving the claimant with no remedy at all.
Breach of contract is a legal cause of action and a type of civil wrong, in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party's performance. Breach occurs when a party to a contract fails to fulfill its obligation(s), whether partially or wholly, as described in the contract, or communicates an intent to fail the obligation or otherwise appears not to be able to perform its obligation under the contract. Where there is breach of contract, the resulting damages have to be paid to the aggrieved party by the party breaching the contract.
Caveat emptor is Latin for "Let the buyer beware". It has become a proverb in English. Generally, caveat emptor is the contract law principle that controls the sale of real property after the date of closing, but may also apply to sales of other goods. The phrase caveat emptor and its use as a disclaimer of warranties arises from the fact that buyers typically have less information than the seller about the good or service they are purchasing. This quality of the situation is known as 'information asymmetry'. Defects in the good or service may be hidden from the buyer, and only known to the seller.
In law, a warranty is an expressed or implied promise or assurance of some kind. The term's meaning varies across legal subjects. In property law, it refers to a covenant by the grantor of a deed. In insurance law, it refers to a promise by the purchaser of an insurance about the thing or person to be insured.
In common law jurisdictions, an implied warranty is a contract law term for certain assurances that are presumed to be made in the sale of products or real property, due to the circumstances of the sale. These assurances are characterized as warranties regardless of whether the seller has expressly promised them orally or in writing. They include an implied warranty of fitness for a particular purpose, an implied warranty of merchantability for products, implied warranty of workmanlike quality for services, and an implied warranty of habitability for a home.
In common law jurisdictions, a misrepresentation is a false or misleading statement of fact made during negotiations by one party to another, the statement then inducing that other party to enter into a contract. The misled party may normally rescind the contract, and sometimes may be awarded damages as well.
In contract law, rescission is an equitable remedy which allows a contractual party to cancel the contract. Parties may rescind if they are the victims of a vitiating factor, such as misrepresentation, mistake, duress, or undue influence. Rescission is the unwinding of a transaction. This is done to bring the parties, as far as possible, back to the position in which they were before they entered into a contract.
Canadian contract law is composed of two parallel systems: a common law framework outside Québec and a civil law framework within Québec. Outside Québec, Canadian contract law is derived from English contract law, though it has developed distinctly since Canadian Confederation in 1867. While Québecois contract law was originally derived from that which existed in France at the time of Québec's annexation into the British Empire, it was overhauled and codified first in the Civil Code of Lower Canada and later in the current Civil Code of Quebec, which codifies most elements of contract law as part of its provisions on the broader law of obligations. Individual common law provinces have codified certain contractual rules in a Sale of Goods Act, resembling equivalent statutes elsewhere in the Commonwealth. As most aspects of contract law in Canada are the subject of provincial jurisdiction under the Canadian Constitution, contract law may differ even between the country's common law provinces and territories. Conversely; as the law regarding bills of exchange and promissory notes, trade and commerce, maritime law, and banking among other related areas is governed by federal law under Section 91 of the Constitution Act, 1867; aspects of contract law pertaining to these topics are harmonised between Québec and the common law provinces.
The Sale of Goods Act 1979 is an Act of the Parliament of the United Kingdom which regulated English contract law and UK commercial law in respect of goods that are sold and bought. The Act consolidated the original Sale of Goods Act 1893 and subsequent legislation, which in turn had codified and consolidated the law. Since 1979, there have been numerous minor statutory amendments and additions to the 1979 act. It was replaced for some aspects of consumer contracts from 1 October 2015 by the Consumer Rights Act 2015 but remains the primary legislation underpinning business-to-business transactions involving selling or buying goods.
English contract law is the body of law that regulates legally binding agreements in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the Industrial Revolution, it shares a heritage with countries across the Commonwealth, from membership in the European Union, continuing membership in Unidroit, and to a lesser extent the United States. Any agreement that is enforceable in court is a contract. A contract is a voluntary obligation, contrasting to the duty to not violate others rights in tort or unjust enrichment. English law places a high value on ensuring people have truly consented to the deals that bind them in court, so long as they comply with statutory and human rights.
A contract is an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more parties. A contract typically involves the transfer of goods, services, money, or a promise to transfer any of those at a future date, and the activities and intentions of the parties entering into a contract may be referred to as contracting. In the event of a breach of contract, the injured party may seek judicial remedies such as damages or equitable remedies such as specific performance or rescission. A binding agreement between actors in international law is known as a treaty.
Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26 [1961] EWCA Civ 7 is a landmark English contract law case. It introduced the concept of innominate terms, a category between "warranties" and "conditions".
Johnson v Agnew [1980] AC 367 is a landmark English contract law case on the date for assessing damages. Lord Wilberforce decided that the date appropriate is the date of breach, or when a contracting party could reasonably be aware of a breach.
The Misrepresentation Act 1967 is a United Kingdom act of Parliament of the United Kingdom which amended the common law principles of misrepresentation. Prior to the Act, the common law deemed that there were two categories of misrepresentation: fraudulent and innocent. The effect of the act is primarily to create a new category by dividing innocent misrepresentation into two separate categories: negligent and "wholly" innocent; and it goes on to state the remedies in respect of each of the three categories.
The sale and purchase of ship is an important aspect of the shipping industry. It may involve large amounts of money and requires brokers to possess knowledge of types of vessels and their function, knowledge of maritime law, as well experience in bargaining. To reduce the number of disputes and smoothen the sale and purchase procedure, normally the ship-owner (seller) and the buyer will appoint brokers as middlemen to handle the transaction. There are three main stages for the sale and purchase of a ship which include: (1) the negotiation and contract stage, (2) the inspections stage, and (3) the completion. From different stages, it includes different important issues and regulations.
Interpreting contracts in English law is an area of English contract law, which concerns how the courts decide what an agreement means. It is settled law that the process is based on the objective view of a reasonable person, given the context in which the contracting parties made their agreement. This approach marks a break with previous a more rigid modes of interpretation before the 1970s, where courts paid closer attention to the formal expression of the parties' intentions and took more of a literal view of what they had said.
Government of Zanzibar v British Aerospace Ltd [2000] EWHC 221 (Comm) is an English contract law case, concerning misrepresentation.
Thomas Witter Ltd v TBP Industries [1996] 2 All ER 573 is an English contract law case, concerning misrepresentation. Doubt has been cast in its decision as to availability of rescission by Floods of Queensferry Ltd v Shand Construction Ltd and Government of Zanzibar v British Aerospace Ltd.
South African contract law is "essentially a modernized version of the Roman-Dutch law of contract", and is rooted in canon and Roman laws. In the broadest definition, a contract is an agreement two or more parties enter into with the serious intention of creating a legal obligation. Contract law provides a legal framework within which persons can transact business and exchange resources, secure in the knowledge that the law will uphold their agreements and, if necessary, enforce them. The law of contract underpins private enterprise in South Africa and regulates it in the interest of fair dealing.
The South African law of sale is an area of the legal system in that country that describes rules applicable to a contract of sale, generally described as a contract whereby one person agrees to deliver to another the free possession of a thing in return for a price in money.
Solle v Butcher [1950] 1 KB 671 is an English contract law case, concerning the right to have a contract declared voidable in equity. Denning LJ reaffirmed a class of "equitable mistakes" in his judgment, which enabled a claimant to avoid a contract. Denning LJ said,
... a contract will be set aside if the mistake of the one party has been induced by a material misrepresentation of the other, even though it was not fraudulent or fundamental; or if one party, knowing that the other is mistaken about the terms of an offer, or the identity of the person by whom it is made, lets him remain under his delusion and concludes a contract on the mistaken terms instead of pointing out the mistake.... A contract is also liable in equity to be set aside if the parties were under a common misapprehension either as to facts or as to their relative and respective rights, provided that the misapprehension was fundamental and that the party seeking to set it aside was not himself at fault.