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Heilbut, Symons and Co. v Buckleton [1913] AC 30

Emphasised the role of intent where one party makes a promise to another where one party may opt to rely upon that information in choosing to contract.

Facts

The defendants, Heilbut et al, were merchants during the rubber trade boom of the 1910’s who claimed to underwrite shares in a rubber trading corporation (‘Filisola Rubber and Produce Estates Ltd’). The claimant, Buckleton, contacted this corporation to enquire about shares purchasing, to which a manager at Hilbut et al responded positively, insinuating the creation of a new rubber company, which persuaded Buckleton to make a sizable purchase for shares in the organization. The subsequently formed rubber production company proved to have far fewer available resources than anticipated and thus suffered greatly in its initial performance, causing Buckleton to sue for breach of warranty as the company’s original representation had implicated far greater resources.

Issue

Whether the defendant’s agent’s remarks as to the new rubber company’s resource pool could be considered a simple representation or a binding contractual promise.

Held

At first instance, the Court contended that Heilbut et al had made an innocent misrepresentation, however, upon appeal it was determined that no fraudulent misrepresentation had occurred as the defending party had not been ‘reckless’ as to the truth of the statement regarding their resources pool and further there was no clear intent that their remarks regarding their resources should amount to a binding contractual promise to act in parallel to their written agreement.

Words: 251


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