Legal Case Summary
Esso Petroleum v Mardon [1976] QB 801
DUTY OF CARE – MISREPRESENTATION
Facts
The plaintiff, Mr Mardon, entered into a tenancy agreement with the defendant, Esso Petroleum, in respect of a petrol station owned by the latter. During the course of the negotiation of the agreement, ‘expert’ advisers employed by the defendant had provided an estimate of the sales which the petrol station could expect which was based on inaccurate information and consequently was significantly inflated. The value of the rent on the agreement had been calculated based on this inflated figure. As a result, it was impossible for the plaintiff to operate the petrol station profitably.
Issue
The issues were: firstly, whether the plaintiff could have any action for misrepresentation given that the figure purported to be an ‘estimate’ rather than a statement of fact; secondly, whether the defendant owed any duty of care to the plaintiff so that he could bring his claim in the tort of negligence.
Decision/Outcome
The Court of Appeal held that the contract could not be voided for misrepresentation as the defendants presented the inflated figure as an estimate rather than as a hard fact. On the other hand, as the defendant had taken it upon themselves to employ experts for the purpose of providing an estimate of sales, they owed a duty of care to the plaintiff to ensure that this was done on the basis of accurate information. The plaintiff was therefore able to recover the losses which he had suffered as a result of the defendant’s negligent misstatement.
Updated 19 March 2026
This summary of Esso Petroleum Co Ltd v Mardon [1976] QB 801 remains legally accurate. The case continues to be good law and is regularly cited as an important authority on two points: the Hedley Byrne principle of liability in tort for negligent misstatement, and the availability of a concurrent duty of care in tort arising from pre-contractual negotiations where one party with special skill or knowledge makes representations to induce the other to contract. There have been no subsequent statutory changes or appellate decisions that have overruled or materially qualified the ratio of this case. Readers should be aware that the wider law of misrepresentation is governed by the Misrepresentation Act 1967, which remains in force, and that the broader Hedley Byrne framework has been developed and refined by later cases including Caparo Industries plc v Dickman [1990] 2 AC 605 and Henderson v Merrett Syndicates Ltd [1995] 2 AC 145, which are relevant background for a full understanding of the duty of care principles at play. The article’s description of the case is, however, accurate as a summary of the decision itself.
