''Bisset v Wilkinson''

927 Year 927 ( CMXXVII) was a common year starting on Monday of the Julian calendar. Events By place Europe * May 27 – Simeon I, emperor (''tsar'') of the Bulgarian Empire, dies of heart failure in his palace at Preslav after a 34- ...

AC 177 is a leading

contract law A contract is an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more Party (law), parties. A contract typically involves consent to transfer of goods, Service (economics), services, money, or pr ...

case from

New Zealand New Zealand () is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and List of islands of New Zealand, over 600 smaller islands. It is the List of isla ...

on the issue of

misrepresentation In common law jurisdictions, a misrepresentation is a False statements of fact, false or misleading''Royal Mail Case, R v Kylsant''

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Question of law, statement of fact made during negotiations by one party to another, the statement then in ...

. The case establishes that a mere misstatement of opinion given fairly cannot amount to a misrepresentation. The case was heard in London by the Privy Council, which was then the final appeal court for New Zealand. As such, the decision, although "very strongly persuasive" on

English contract law 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 ...

, is not conclusively binding. Nevertheless, the case has been cited and applied in England and Wales several times.

Facts

In New Zealand in May 1919 Mr Bisset entered into a binding contract to sell to Mr Wilkinson two contiguous blocks of farmland for £13,260. These blocks comprised respectively. During negotiations Bisset told Wilkinson that "with a good six horse team, his idea was that the farm would carry 2,000 sheep". After 2 years of unsuccessful farming, Wilkison concluded that the land could not support 2,000 sheep, and he brought an action for misrepresentation to cancel the contract and get his money back.

Advice

The Privy Council advised that the statements about the farmland could not amount a serious representation based on Bisset's knowledge. At the time of the deal, both parties understood that Bisset had not used the land for sheep farming, and thus any statement as to the farmland's capacity would only be an estimate. Giving the leading judgment, Lord Merrivale stated that important considerations were the 'material facts of the transaction, the knowledge of the respective parties and their relative positions, the words of representation used, and the actual condition of the subject-matter spoken of …’. The judge added: In addition, Lord Merrivale noted that Wilkinson had "failed to prove that the farm (if properly managed) was incapable of being occupied by two thousand sheep". Viscount Dunedin, Lord Atkinson, Lord Phillimore and Lord Carson agreed.

Significance

The case clarifies that a misstatement of "fact" may be a misrepresentation, but misstatements of opinion, intention or law are not. By contrast, in situations where one party has specialist knowledge of the subject (so that his "opinion" is one which is effectively a "statement of fact") then the misstatement becomes an actionable misrepresentation, as in ''

Esso Petroleum Co Ltd v Mardon ''Esso Petroleum Co Ltd v Mardon'' misrepresentation. It holds that the divide between a statement of opinion and fact becomes more factual if one holds himself out as having expert knowledge. Facts Mr Mardon was buying a petrol station franch ...

'', and in '' Smith v Land & House Property Corp''.''Smith v Land & House Property Corp'' (1885)

References

{{DEFAULTSORT:Bisset V Wilkinson New Zealand contract case law English misrepresentation case law Judicial Committee of the Privy Council cases on appeal from New Zealand 1926 in case law 1926 in New Zealand law

Facts

Advice

Significance

See also

References