Thomas Witter Ltd v TBP Industries Ltd [1996] 2 All ER 573
Contract law – Misrepresentation – Sale of a business
Facts
The defendant was a conglomerate organisation that negotiated to sell a carpet company to the plaintiff. During the negotiation of the sale of the company, the defendant made a negligent representation that there would be a one-off expense of £120,000 in accounts but that this spread the cost of producing the accounts over two years rather than writing the cost off completely. The contract of sale also included a clause which stated that the plaintiff acknowledged they had not entered into the agreement on the basis of any representation or warranty made by the defendant. The plaintiff claimed for negligent misrepresentation on the basis that the statement regarding the accounts that was made by the defendant was inaccurate and the defendant attempted to rely on the limitation clause in the agreement between the parties.
Issue
The issue for the court was to understand whether the defendant could rely on the limitation clause in the contract. If the defendant could rely on the clause, this would enable them to avoid liability for the representations that they had made during the negotiation of the sale.
Decision/Outcome
The court found in favour of the plaintiff. It did so because the clause regarding the representation could not have effect as per the Misrepresentation Act 1967, section 1 and the Misrepresentation Act 1967, section 3 as the clause attempted to exclude all forms of misrepresentation, including fraudulent misrepresentation, from the agreement. Moreover, the court found that the clause only applied to breaches of the contractual agreement and did not apply to inducing the plaintiff into the agreement.
Updated 20 March 2026
This case summary remains broadly accurate. Thomas Witter Ltd v TBP Industries Ltd [1996] 2 All ER 573 is still a valid and frequently cited authority on the operation of section 3 of the Misrepresentation Act 1967, which requires that any clause purporting to exclude or restrict liability for misrepresentation, or any remedy available to the innocent party, must satisfy the reasonableness requirement under the Unfair Contract Terms Act 1977.
One point worth noting for readers: the article states that the clause failed partly because it attempted to exclude liability for fraudulent misrepresentation. Jacob J’s reasoning in Witter was that a clause cannot satisfy the reasonableness test under section 3 if it is drafted so broadly as to purport to exclude even fraudulent misrepresentation. This specific reasoning has been subject to some academic and judicial discussion in later cases. In particular, the Court of Appeal in Government of Zanzibar v British Aerospace (Lancaster House) Ltd [2000] 1 WLR 2333 and subsequently in Axa Sun Life Services plc v Campbell Martin Ltd [2011] EWCA Civ 133 examined the interpretation of entire agreement and non-reliance clauses in the misrepresentation context. Readers should be aware that the precise effect of such clauses continues to be refined by the courts, and the law in this area, while built on the foundation that Witter helped establish, has developed further since 1996.
The Misrepresentation Act 1967 itself remains in force and unamended in the relevant respects. The article’s core legal propositions are sound for introductory purposes, but students researching this area should also consider subsequent case law for a complete picture.
