Long v Lloyd [1958] EWCA Civ 3; [1958] 1 WLR 753; [1958] 2 All ER 402
Court of Appeal, 19 May 1958 — innocent misrepresentation and loss of the right to rescind through acceptance of goods.
Facts
Long and Lloyd were haulage contractors. Lloyd advertised a second-hand lorry for £850 as being in exceptional condition. He also told Long that it was in first-class condition, could reach 40 miles per hour and would travel eleven miles on a gallon of fuel.
Long inspected and test-drove the lorry. He noticed some defects, including a broken speedometer, a missing accelerator spring and difficulty engaging top gear. After further assurances, he bought it for £750 and paid half the price.
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On a subsequent journey to Rochester, Long discovered further problems: the dynamo stopped working, an oil seal leaked, a wheel was cracked, and the lorry used eight gallons of fuel over about forty miles. That evening he complained to Lloyd. Lloyd offered to pay half the cost of a replacement dynamo, and Long accepted.
After the dynamo was fitted, Long sent his brother on a business trip to Middlesbrough in the lorry. It broke down. Long then wrote demanding his money back and offering to return the vehicle. An expert later found serious defects making it unroadworthy.
The trial judge found that Lloyd’s material representations had induced the purchase and were untrue, but had been made honestly. Long did not pursue an allegation of fraud. His claim for rescission on the ground of innocent misrepresentation was dismissed, and he appealed.
Issue
Could Long rescind the completed sale for innocent misrepresentation, or had his conduct after discovering the defects already brought any such right to an end?
The appeal also raised a broader question, disputed in earlier authorities: whether innocent misrepresentation could justify rescission after completion of a sale of goods. The court distinguished that general question from whether Long could obtain the remedy on these facts.
Decision
The Court of Appeal dismissed the appeal. Pearce LJ delivered the judgment of the court, which also included Jenkins and Parker LJJ. Even assuming that Long initially possessed a right to rescind after completion, he had lost it before demanding his money back.
Why Long’s conduct prevented rescission
The court recognised that some claims about the lorry, particularly its fuel consumption, could only be tested by using it. Taking delivery did not therefore answer every question about acceptance. Long could have a reasonable opportunity to discover whether those representations were true.
By the time he complained after the Rochester trip, however, he knew about several significant defects and the poor fuel consumption. Accepting Lloyd’s contribution towards a replacement dynamo was difficult to reconcile with retaining a right to undo the sale.
The further business trip was decisive. With knowledge of the lorry’s condition and performance, Long nevertheless sent it to Middlesbrough. In the circumstances, this amounted to final acceptance of the vehicle and extinguished any remaining right to rescind. The later breakdown did not restore that right.
What the court left open
The court discussed the conflicting authorities on rescission of completed contracts but expressly declined to resolve that wider issue. It was enough to hold that Long’s claim failed even on the assumption most favourable to him.
The case should therefore not be stated as a decision establishing that innocent misrepresentation always permits rescission after completion. Its operative conclusion concerned the loss of an assumed right through the buyer’s acceptance of the goods after learning of their defects.
Judgment: Long v Lloyd, Court of Appeal.
