Foodco UK Llp (t/a Muffin Break) & Ors v Henry Boot Developments Ltd

A commercial non-reliance clause may create a contractual estoppel that precludes claims based on innocent or negligent misrepresentation, provided that the clause is reasonable under statutory controls. Clear and unmistakable language is required to exclude liability for an agent’s fraud, while liability for a contracting party’s own fraud cannot be excluded.

A prediction about future events is not itself an actionable representation. It may imply a present fact, such as an honest belief in the prediction or reasonable grounds for it. In deceit, the claimant must also prove that the representor understood the statement in the alleged sense and made it knowingly false, without belief in its truth, or recklessly. A duty to correct arises where a continuing representation has become false to the representor’s knowledge before the contract is concluded.

Six commercial tenants entered into agreements for leases of units at a motorway-related retail and catering development. The development attracted far fewer visitors than had been forecast. The tenants alleged fraudulent and, alternatively, non-fraudulent misrepresentations concerning anticipated visitor numbers, motorway signage, a coach interchange, travel information and other facilities.

Each agreement contained an entire-agreement and non-reliance clause, subject to an exception for written replies to enquiries. The court determined liability only, leaving remedies to be addressed if liability were established. The central issues were whether the clause precluded non-fraudulent claims, whether the alleged statements amounted to representations of present fact, whether any continuing representations required correction, and whether fraud had been proved.

1. The claim of fraudulent misrepresentation failed. The non-reliance clauses precluded claims for innocent and negligent misrepresentation, except claims arising from written replies by the developer’s solicitors to the tenants’ solicitors. The clauses did not exclude fraud because they contained no clear acknowledgement of non-reliance on fraudulent representations.

2. The clauses created a contractual estoppel. The developer did not need to prove that it believed the acknowledgements of non-reliance were factually true. The clauses were reasonable under the Unfair Contract Terms Act 1977. The parties sought commercial certainty, there was no substantial imbalance of bargaining power, the tenants had legal advice, the terms were negotiable, and the exception for written replies allowed important matters to be formalised.

3. Fraud required proof that a false representation was made knowingly, without belief in its truth, or recklessly. A merely careless statement, or a belief unsupported by reasonable grounds, did not by itself establish fraud. The absence of reasonable grounds could nevertheless provide evidence that an asserted belief was not genuinely held. Fraud also required assessment of the meaning which the representor personally understood the statement to convey.

4. A statement about the future was not actionable merely because events later differed from the prediction. It could imply a present fact, including that the maker honestly held the prediction or had reasonable grounds for it. The implication depended upon the particular words and context. It was not a general rule that every prediction implied an absence of any information capable of calling it into question.

5. The developer honestly relied upon the independent visitor forecast and continued to use it for its own investment decisions. Criticism received from a third party and later changes concerning advance signage did not prove that the developer disbelieved the forecast, was reckless about it, or deliberately avoided further enquiries. At worst, failing to obtain an updated forecast was careless.

6. The statements concerning the development’s status, anticipated visitor numbers, travel information, dwell times and plans for a coach interchange were either true statements of existing belief or intention, non-actionable predictions, or statements honestly made. The replies to pre-contract enquiries were true or were not shown to have been made fraudulently.

7. No duty to correct arose unless the developer knew, or was reckless as to whether, an earlier representation had become false before contracting. In any event, disclosure of the traffic-signs agreement to the tenants’ solicitors communicated the relevant position to the tenants. The claim was dismissed.

not stated in the judgment.