Heilbut, Symons & Co. v. Buckleton

"Heilbut, Symons & Co v Buckleton" [1913] AC 30 is a leading House of Lords decision on misrepresentation in contract law. The Court held that an innocent misrepresentation gave no right to damages.

Background

Heilbut, Symons & Co. were rubber merchants who were underwriting shares of what they claimed was a rubber company. Buckleton called up a manager at Heilbut to inquire about the shares. In response to the questions, the manager stated that they were "bringing out a rubber company". Based on this statement, Buckleton purchased a large amount of shares. The shares turned out not to be for a rubber company at all, the shares did very poorly. Buckleton sued for breach of warranty.

At trial the Court found that Heilbut made misrepresentation but was not done fraudulently. Nevertheless, at trial is was found that there was a warranty in the statement regarding the rubber company. The Plaintiff Buckleton succeeded at trial.

Opinion of the Court

For the Court, Lord Moulton identified two ways that the action could be successful. First, if the plaintiff could show fraudulent misrepresentation "or what is equivalent thereto, must be made recklessly, not caring whether it be true or not."Second, if there was intent ("animus contrahendi") to be held to a promise then there may be a collateral contract, that would bind Heilbut to their representation. However, they are difficult to find, and, on the fact, none was found.

In conclusion, Moulton held::"It is, my Lords, of the greatest importance, in my opinion, that this House should maintain in its full integrity the principle that a person is not liable in damages for an innocent misrepresentation, no matter in what way or under what form the attack is made. In the present case the statement was made in answer to an inquiry for information. There is nothing which can by any possibility be taken as evidence of an intention on the part of either or both of the parties that there should be a contractual liability in respect of the accuracy of the statement. It is a representation as to a specific thing and nothing more."