Zanzibar v British Aerospace (Lancaster House Ltd) [2000] 1 WLR 2333
Contract – Misrepresentation – Payments – Defects –Misrepresentation Act 1967 – Lease – Damages – Rescission
Facts
The complainants, the Government of Zanzibar, wanted to purchase an executive jet from the British Aerospace (Lancaster House Ltd). In order to do this, they entered into a lease agreement with a finance company, who subsequently bought the plane. However, the plane in question that was purchased was faulty and despite repairs, it continued to be defective. Due to this, the complainants stopping paying their instalments for the plane that they had agreed with the finance company. In response to this, the finance company took back the plane they owned and sold it on.
Issues
The complainants argued that representations of the plane said that it was without any defects, as well as being reliable and ready to use. They brought a claim against the defendants to rescind their contract under section 2(1) of the Misrepresentation Act 1967 or receive damages under section 2(2) of the Misrepresentation Act 1967. The issue in this case was whether the contract could be rescinded or if damages could be awarded.
Held
It was held that due to clause 23 in the sale agreement between the parties, the contract could not actually be rescinded. This had stated the buyer could not rely on representations made by the seller. In addition, the plane had already been sold. This also meant that damages could not be awarded, as this was a substitute for rescission, which was barred in this case.
Updated 20 March 2026
This case summary accurately reflects the decision in Government of Zanzibar v British Aerospace (Lancaster House) Ltd [2000] 1 WLR 2333, as reported. The summary correctly identifies the central issues under sections 2(1) and 2(2) of the Misrepresentation Act 1967, which remains in force without material amendment to the provisions discussed. The holding — that rescission was barred both by a contractual clause and by the fact that the subject matter had been disposed of, and that damages under s.2(2) could not be awarded as a substitute where rescission was unavailable on those facts — is accurately described. Readers should note that the relationship between s.2(2) damages and the bars to rescission has been the subject of ongoing academic and judicial debate, and later cases such as UCB Corporate Services Ltd v Thomason [2005] EWCA Civ 225 have engaged with related issues. The Misrepresentation Act 1967 itself has not been substantively amended in the areas relevant to this case. The summary is broadly accurate for introductory purposes, but students should be aware it does not address the nuances of how the courts approach the availability of s.2(2) damages in later authorities.
