Long v Lloyd

Where a buyer seeks to rescind a completed sale of a chattel for innocent misrepresentation, the court may decide the case on acceptance without determining whether rescission is available in principle. A buyer ordinarily has an opportunity to inspect at delivery and may have reasonable time to test representations requiring use. Informed conduct inconsistent with the seller’s ownership, including continued business use, may amount to final acceptance. Acceptance extinguishes any surviving right to rescind.

The defendant sold the plaintiff a lorry after making representations about its condition and performance. The representations were honestly made but were found to be untrue. After discovering serious defects, the plaintiff sought rescission of the completed sale. Mr Justice Glyn-Jones dismissed the claim. The Court of Appeal considered whether a right to rescind for innocent misrepresentation survived completion and, if so, whether the plaintiff had lost it by accepting and continuing to use the lorry.

The Court of Appeal, in a judgment delivered by Lord Justice Pearce as the judgment of the court, dismissed the appeal.

1. Availability of rescission. The court did not decide whether innocent misrepresentation can give rise to rescission after completion of a sale of a chattel passing by delivery. The doubts surrounding the general rule stated in Seddon v North Eastern Salt Co Ltd 1 Ch., 326 remained unresolved. The court proceeded on the assumption that such a right might exist.
2. Effect of acceptance. The reasoning in Leaf v International Galleries 1950 2 K.B. 86 showed that any such right may be lost by acceptance. Delivery is ordinarily the proper time and place for examination and acceptance. A buyer may have a reasonable period to test a representation that can be verified only by use, but must avoid conduct inconsistent with the seller’s ownership.
3. Application. The plaintiff drove the lorry home, used it in his business after discovering defects, accepted the defendant’s offer to pay half the dynamo cost, and then sent the lorry on a further business journey. That conduct amounted to final acceptance for better or worse. It conclusively extinguished any right of rescission remaining after completion, despite the short period between delivery and attempted rejection.
4. Order. The appeal was dismissed with costs. Leave to appeal to the House of Lords was granted.

• Court of Appeal: dismissed the appeal from the judgment of Mr Justice Glyn-Jones, with costs, and granted leave to appeal to the House of Lords.
• High Court: Mr Justice Glyn-Jones dismissed the plaintiff’s claim for rescission.