Express Warranties And Misrepresentations
Before or at the time of entering a contract a buyer’s attention will frequently be drawn to statements which relate to the quality and potential of the goods. Such statements may take any one of a number of forms and the way they are classified will have an important effect on the remedies available should they ultimately be found to be false or unsubstantiated. Thus a statement may be no more than a mere ‘puff ’ or a matter of opinion and, as such, it will usually give rise to no liability whatsoever. Alternatively it may constitute a misrepresentation of fact inducing the representee to enter into the contract. The traditional remedy would then be rescission of the contract and an indemnity in equity, damages in the tort of deceit if the statement was made fraudulently, and, later, damages under the Hedley Byrne doctrine if it was made negligently. Within English law the Misrepresentation Act 1967 is now of considerable importance in such cases. Such a statement may also give rise to an estoppel, thus precluding its maker from asserting its falsity as against a person who was intended to rely on it and did rely on it to his detriment. Finally, the statement may be classified as a contractual term. Where this is so the maker will be taken to have warranted or guaranteed the truth of the statement and a remedy will be available without the need to prove deceit or negligence. The precise nature of this remedy (whether repudiation or damages) will depend on the status or importance of the term to the contract. This classification and its legal consequences will now be examined in more detail insofar as it affects the relationship of seller and purchaser. Thereafter it is proposed to discuss the possible application of some of the principles to manufacturers. In this latter context particular reference will be made to the express warranty theory of American law and to the collateral contract doctrine of English and Commonwealth law.