QUESTION – ELEMENTS OF CONTRACT
Lord Gilbert is short of money. He decides he will have to sell the cherished motorcycle his
uncle gave him. His uncle told him it was the motorcycle that won the last Le Mans race before
the Second World War began and was in ‘perfect original condition’. Lord Gilbert takes the
motorcycle to ‘Venus Motorcycle Garage’. While a garage employee, Jack, is inspecting a
motorcycle, Lord Gilbert says: ‘Don't worry old boy. I can assure you that it is a perfect pre-
war motorcycle and has never had a crash. I know you need to be sure so keep it for a week
to check it out.’ As he left Lord Gilbert gave Jack a thick file of documents about the bike. The
following evening Lord Gilbert invites his uncle to dinner to tell him that he is going to have
to sell the motorcycle. Lord Gilbert is concerned that his uncle may be upset but his uncle tells
him not to worry as he had made up the story about it being a famous race winner. In fact it
is made up from parts obtained from motorcycles that crashed after the war. Next week
Venus Motorcycle Garage’ expert in valuation is off sick and nobody looks at the
documentation. An inspection by an expert would have immediately revealed that it was
made of post-war parts and the documents would have confirmed that it was not the famous
race winner. When Lord Gilbert returns to Venus Motorcycle Garage he is offered and accepts
£50,000 for the motorcycle which is in fact worth only £500. The true value of the motorcycle
is only discovered several months later. If the motorcycle had been the famous race winner
Lord Gilbert originally believed it to be it would have been worth £100,000. Advise Venus
Motorcycle Garage.
, Answer:
In order to answer this question, a discussion must be made on whether there is a
vitiating factor in the contract between the buyer, Venus Motorcycle Garage, and the seller
Lord Gilbert, which will make the contract voidable. If misrepresentation is proven, the
possible remedies for Venus Motorcycle Garage will be considered.
Elements of Actionable Misrepresentation
Generally, misrepresentation can be defined as an unambiguous, false statement of
existing fact or law which is addressed to the party misled, and materially induced the party
to enter into the contract. 1 Relating the statement mentioned by Lord Gilbert, ‘Don't worry
old boy. I can assure you that it is a perfect pre-war motorcycle and has never had a crash’, it
must first be analysed whether the statement was a misrepresentation.
An Unambiguous, False Statement of Existing Fact or Law
To start with, it must be proven that the statement was an unambiguous, false
statement of existing fact.2 In this case, Gilbert may argue that his statement was just a ‘mere
puff’ and therefore to make the statement ambiguous. He may use the case of Dimmock v
Hallett as reference which the seller in the case described his own farm as ‘fertile and
improvable’ and the court treated it as a mere ‘flourishing description’. 3 Following the case,
the phrase used in the statement ‘perfect pre-war motorcycle’ will be considered as sales talk.
However, to counter this, what can be rise is the particular word used by the seller is ‘assure’,
which has the meaning of guarantee. In other words, the seller is ensuring that the motorcycle
he is going to sell was in perfect condition and was a pre-war motorcycle. This had negated
the doctrine of ‘mere puffs’ since generally, the more specific the description is, the less likely
it will be treated as sales talk. 4 Since the seller had given assurance about his product, the
1
Ewan Mckendrick, Contract Law Palgrave Version, 226.
2
ibid
3
Dimmock v Hallett (1866-67) LR 2 Ch App 21
4
Mckendrick n (1) 227.
Lord Gilbert is short of money. He decides he will have to sell the cherished motorcycle his
uncle gave him. His uncle told him it was the motorcycle that won the last Le Mans race before
the Second World War began and was in ‘perfect original condition’. Lord Gilbert takes the
motorcycle to ‘Venus Motorcycle Garage’. While a garage employee, Jack, is inspecting a
motorcycle, Lord Gilbert says: ‘Don't worry old boy. I can assure you that it is a perfect pre-
war motorcycle and has never had a crash. I know you need to be sure so keep it for a week
to check it out.’ As he left Lord Gilbert gave Jack a thick file of documents about the bike. The
following evening Lord Gilbert invites his uncle to dinner to tell him that he is going to have
to sell the motorcycle. Lord Gilbert is concerned that his uncle may be upset but his uncle tells
him not to worry as he had made up the story about it being a famous race winner. In fact it
is made up from parts obtained from motorcycles that crashed after the war. Next week
Venus Motorcycle Garage’ expert in valuation is off sick and nobody looks at the
documentation. An inspection by an expert would have immediately revealed that it was
made of post-war parts and the documents would have confirmed that it was not the famous
race winner. When Lord Gilbert returns to Venus Motorcycle Garage he is offered and accepts
£50,000 for the motorcycle which is in fact worth only £500. The true value of the motorcycle
is only discovered several months later. If the motorcycle had been the famous race winner
Lord Gilbert originally believed it to be it would have been worth £100,000. Advise Venus
Motorcycle Garage.
, Answer:
In order to answer this question, a discussion must be made on whether there is a
vitiating factor in the contract between the buyer, Venus Motorcycle Garage, and the seller
Lord Gilbert, which will make the contract voidable. If misrepresentation is proven, the
possible remedies for Venus Motorcycle Garage will be considered.
Elements of Actionable Misrepresentation
Generally, misrepresentation can be defined as an unambiguous, false statement of
existing fact or law which is addressed to the party misled, and materially induced the party
to enter into the contract. 1 Relating the statement mentioned by Lord Gilbert, ‘Don't worry
old boy. I can assure you that it is a perfect pre-war motorcycle and has never had a crash’, it
must first be analysed whether the statement was a misrepresentation.
An Unambiguous, False Statement of Existing Fact or Law
To start with, it must be proven that the statement was an unambiguous, false
statement of existing fact.2 In this case, Gilbert may argue that his statement was just a ‘mere
puff’ and therefore to make the statement ambiguous. He may use the case of Dimmock v
Hallett as reference which the seller in the case described his own farm as ‘fertile and
improvable’ and the court treated it as a mere ‘flourishing description’. 3 Following the case,
the phrase used in the statement ‘perfect pre-war motorcycle’ will be considered as sales talk.
However, to counter this, what can be rise is the particular word used by the seller is ‘assure’,
which has the meaning of guarantee. In other words, the seller is ensuring that the motorcycle
he is going to sell was in perfect condition and was a pre-war motorcycle. This had negated
the doctrine of ‘mere puffs’ since generally, the more specific the description is, the less likely
it will be treated as sales talk. 4 Since the seller had given assurance about his product, the
1
Ewan Mckendrick, Contract Law Palgrave Version, 226.
2
ibid
3
Dimmock v Hallett (1866-67) LR 2 Ch App 21
4
Mckendrick n (1) 227.
