Horsfall v Thomas (1862) 1 H & C 90
Contract law – Fraudulent statement
The plaintiff was employed by the defendant to make him a steel gun which the defendant would pay for with two bills of exchange. The plaintiff delivered the gun to the defendant but it had a defect which would have been recognised by the defendant had he examined it. This would have entitled him to reject the gun. Instead, the defendant did not examine the gun and delivered the bills of exchange as agreed. The plaintiff later wrote to the defendant stating that the gun had no faults and was made from the best metal. The defendant subsequently tested the gun, which was faulty, and sued the plaintiff. The action of the defendant was brought on the basis that he was encouraged to accept the gun by the fraud of the plaintiff.
The defendant claimed that as part of this fraud, the plaintiff had actively concealed the defect in the gun from him ahead of the inspection. Further to this, it was argued by the plaintiff that the statement that was made by the letter from the defendant was fraudulent as it had stated that the gun had no faults.
The court found that there was no evidence to support the claim of the plaintiff that the defendant had acted fraudulently. With regards to the inspection, the court found it impossible that the plaintiff hides a defect from the defendant, as the defendant had not considered looking at this at the time of inspection. Moreover, the court found that the letter that was later sent by the defendant did not contain any fraudulent statement as the defendant believed the statement was correct and accurate.