Oscar Chess Ltd v Williams [1957]: Innocent Misrepresentation

Oscar Chess Ltd v Williams [1957] 1 WLR 370 is a foundational case in English contract law. This case illustrates that not all statements made in the course of negotiations become contractual terms. It highlights the importance of relative expertise and intention when deciding whether a representation is a term.

• Court: Court of Appeal (Civil Division), England and Wales
• Judges: Denning LJ, Hodson LJ, Morris LJ
• Date: 11 November 1956
• Citation: [1956] EWCA Civ 5; [1957] 1 WLR 370; [1957] 1 All ER 325
• Areas of Law: Misrepresentation; Warranty; Terms in a Contract (distinction between representations and warranties)

Facts: Oscar Chess Ltd v Williams

Mr. Williams traded in a second-hand Morris 10 car to Oscar Chess Ltd, a car dealer, as part-exchange for a new Hillman Minx. Mr. Williams stated the Morris was a 1948 model, based on the car’s registration book.

Oscar Chess Ltd allowed £290 for the Morris, assuming it was a 1948 car. Eight months later, Oscar Chess discovered it was actually a 1939 model, worth only £175.

The mistake originated from a forged registration book, though neither party was aware of the fraud at the time.

Oscar Chess sued Mr. Williams for the £115 difference, arguing that his statement was a contractual term.

Issue

Was Mr. Williams’ statement about the age of the car a term of the contract or merely an innocent misrepresentation?

Court’s Decision (Oscar Chess Ltd v Williams)

The majority (Denning LJ and Hodson LJ) held that Mr. Williams was not liable for the £115 difference in car value.

The representation was not a contractual term—instead it was held to be an innocent misrepresentation.

Lord Denning LJ applied an objective test: Would a reasonable bystander conclude Williams intended to warrant the car’s age? The answer was no, given his lack of expertise and transparent reliance on a log book.

Here, the buyer (car dealer) was in a better position to know the car’s age (they could have checked the chassis/engine number).

The seller was a private individual, relying on a fraudulent logbook. He did not intend to bind himself to the truth of the statement.

Morris LJ dissented, arguing that the statement was a term of the contract.

Quotes from the Case

“The question whether a warranty was intended depends on the conduct of the parties, on their words and behaviour, rather than on their thoughts. If an intelligent bystander would reasonably infer that a warranty was intended, that will suffice.”

“It must have been obvious to both that the seller had himself no personal knowledge of the year when the car was made. He only became owner after a great number of changes. He must have been relying on the registration book. It is unlikely that such a person would warrant the year of manufacture. The most he would do would be to state his belief, and then produce the registration book in verification of it. In these circumstances the intelligent bystander would, I suggest, say that the seller did not intend to bind himself so as to warrant that it was a 1948 model. If the seller was asked to pledge himself to it, he would at once have said “I cannot do that. I have only the log-book to go by, the same as you.”

(Denning LJ)

You can refer to the full text of the case here:

https://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWCA/Civ/1956/5.html

---

YOU MIGHT ALSO LIKE:

MORE FROM CONTRACT LAW:

• Coastal Estates Pty Ltd v Melevende [1965]: Contract Rescission
• Summergreene v Parker [1950] HCA 13: Contract Not Concluded
• Coulls v Bagot’s Executor & Trustee Co Ltd [1967] HCA 3