Rescission Case Law Uk

The Court of Appeal referred to Leaf v International Galleries [1950] 2 KB 86, in which resignation was not permissible because a defendant in an action for misrepresentation should not be worse off than someone who had made misrepresentation a contractual clause. Baker J.`s subsequent decision in Pisante v. Logothetis deals in detail with the granting of a pecuniary payment following the annulment of a settlement which the applicant had been induced to make by the defendant`s false statement. The judge noted the following: This practice note indicates when and how an innocent party can revoke a contract for misrepresentation, why they want to do so, and when withdrawal is not allowed. Under English law, it may be misleading to say in relation to withdrawal that a contract is “terminated” or “terminated ab initio”. These clauses can lead to serious confusion as to the legal situation of the parties. There are cases in which withdrawal was possible even if the contracts were fully executed. The Court of Appeal confirmed that a court does not have the discretion to award damages under subsection 2(2) of the Act if resignation is not legally possible. However, it may award damages under Article 2(1) unless the defendant proves that he had reasonable grounds to believe (and believe) that the misrepresentation was true.

However, courts are more likely to deal with the content of the notice than the exact terms used to exercise an alleged right of withdrawal. Longmore J. held that the passage of time alone could not constitute an obstacle to repeal. M. Salt had only become aware of the possibility of resignation after disclosure in the proceedings at first instance, when he found that the vehicle was not new. It would be unfair if Stratstone could rely on the claim that it was also too late to reject the car and that it was also too late to terminate the contract. 
In his concurring judgment, Roth J. emphasized that resignation for deception was a just remedy and that in the absence of a statute of limitations, an objection to setting aside must be based on equity. It is therefore contradictory to say that withdrawal can be excluded by prescription. Only the passage of time, which makes it unreasonable in all circumstances to grant a withdrawal, can exclude the remedy. In these cases, adjustments between the parties may be necessary. This may require specific and tailored compensation orders to make the withdrawal effective.

District Judge Hickman ruled that Mr. Salt would not have purchased the car if Stratstone had not falsely stated that it was new. It considered that damages were the most appropriate remedy in the present case. It decided that it was not possible to order the termination of the contract because it was impossible to restore the original pre-contractual state because (i) the vehicle was now registered and could not be returned as an unregistered vehicle and (ii) a considerable period of time had elapsed since the sale and it could not adjust the amount of the price to be refunded, to take into account the depreciation of the vehicle. Hickman DJ therefore considered that Mr. Salt was limited to a claim for damages, which he estimated to be the difference of £3,000 between the value of the vehicle if it had been new at the time of sale (£22,000.00) and its actual value (£19,000) plus £250 for inconvenience caused by the need to repair the vehicle`s defects. Mr. Salt appealed. provided that (1) restoration in Integrum is possible and (2) recourse is no longer available because there is an obstacle to withdrawal in the event that there is an obstacle to withdrawal.

On appeal, Harris QC J. overturned the district judge`s decision. He noted that it was possible to return the parties to their pre-contractual position because: (i) the vehicle still existed; (ii) the fact of registration shall not prevent revocation; (iii) any difference in the value of the vehicle should be at the risk of the false representative and not the misrepresentation; and (iv) a delay was not sufficient to prevent the repeal. For these reasons, Harris J. ordered the setting aside and awarded Mr. Salt his costs by way of compensation. Stratstone appealed. Damages play an important role in the decision to withdraw. “If it is claimed. that the contract should or has been cancelled.

The court. may declare that the contract continues to exist and award damages in lieu of withdrawal`. It is important to distinguish the recourse of withdrawal from the remedy of termination for breach of contract, which historically has sometimes been referred to as resignation (or “resignation of futuro”). In this context, the “withdrawal” may take effect by mutual agreement between the parties. In the event of fraud, the amount of damages must remain fair to both parties. The district judge overturned that decision and ordered it to be set aside. The respondent appealed. Withdrawal is fair and discretionary.

[4] It is used as a synonym for legal termination.