Complete Clarity Solicitors


Misrepresentation in a contract – new ruling

The Supreme Court has recently given its ruling in a contractual dispute involving the lease to a grouse moor.

The case dates back to 2006 when a Mr Erskine was in discussions with the owners of a grouse moor over the possibility of leasing it – although he had expressed concerns about the level of the breeding population.

The owners had emailed him back, reassuring him about the capacity of the moor. In the email, the respondent gave information about the grouse counts carried out on the moor earlier that year and the estimated population extrapolated from those counts. However, as the counts were carried out in the most heavily populated areas, they represented an over-estimate.

Following this email, Mr Erskine went ahead and took out the lease, in the name of a limited liability partnership, Cramaso.

When Mr Erskine discovered that the counting areas were not representative and that the grouse population was smaller than he had believed, he brought legal proceedings, alleging that the respondents had deliberately misled him in order to induce him to take the lease.

The problem he faced was that the lease had been taken out in the name of the partnership, Cramaso, but the respondents had been dealing with Mr Erskine as an individual when the allegedly misleading representations were made. The question for the courts was therefore whether the respondents were liable to Cramaso.

The case worked its way up through the courts and has now reached the Supreme Court, which handed down its ruling last week.

According to Lord Reed, who gave the main judgment, the representation made to Mr Erskine was a continuing one, capable of remaining in effect until the contract was concluded.

He found that in continuing and concluding the contractual negotiations with Cramaso, through its agent Mr Erskine, without having withdrawn the representation earlier made to him as an individual, the respondents by their conduct implicitly asserted to Cramaso the accuracy of that representation.

It continued to be foreseeable that the representation would induce the other party to the negotiations to enter into a contract. The respondents therefore assumed a responsibility towards Cramaso for the accuracy of the representation and owed it a duty of care, which they failed to fulfil.

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