End date November 11, 1912 | Ruling court House of Lords | |
 | ||
Full case name Heilbut, Symons & Co v Buckleton Decided November 11, 1912 (1912-11-11) Citation(s) [1913] AC 30, [1912] UKHL 2 Judge sittings Richard Haldane, 1st Viscount Haldane, John Atkinson, Baron Atkinson, John Fletcher Moulton, Baron Moulton Similar Oscar Chess Ltd v Williams, Dick Bentley Productio, McCutcheon v David MacBray, Smith v Land and House Pr, Esso Petroleum Co Ltd v | ||
Heilbut, Symons & Co v Buckleton [1912] UKHL 2 is an English contract law case, given by the House of Lords on misrepresentation and contractual terms. It held that a non-fraudulent misrepresentation gave no right to damages. This was decided some time before Hedley Byrne v Heller, where damages for negligent misrepresentation were introduced in English law, and it would today be regarded as wrongly decided.
Contents
Facts
During an economic boom in the rubber trade 1910 (at the end of the Amazon rubber boom), Heilbut, Symons & Co were merchants who were underwriting shares of what they claimed was a rubber business, called the Filisola Rubber and Produce Estates, Limited in Mexico. Buckleton called up a manager at Heilbut to inquire about the shares. In response to the questions, the manager confirmed that they were "bringing out a rubber company". Based on this statement, Buckleton purchased a large number of shares. The company turned out to have far fewer rubber trees than expected. The shares performed 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 it was found that there was a warranty in the statement regarding the rubber company. The claimant, Buckleton, did not succeed at trial.
Judgment
The House of Lords held that no damages could be payable because it was not a fraudulent misrepresentation. 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, Lord Moulton stated that such collateral contracts would be rare, and on the facts none was found. Lord Moulton said,
Significance
Although Heilbut, Symons & Co would today be counted as having made at least a negligent misrepresentation, the case still has relevance for the general principle that representations become part of the contract if (as a very general principle) this is "intended". In Oscar Chess Ltd v Williams the Court of Appeal further clarified that the balance of information between a buyer and seller is relevant to determine what was actually intended, giving preference for the intentions of non-commercial parties who rely on others.