Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd [1965]

Facts

The claimant, Dick Bentley, was aware of the defendant, Harold Smith’s, reputation
as an expert in prestige cars and requested that the defendant keep an eye out for a
well vetted and kept Bentley car, as he wished to purchase one. When the defendant
obtained a Bentley, he informed the claimant and recommended it to him, stating that
the vehicle had been previously owned by a German man who had replaced some of
the car’s original parts and had only driven approximately 20,000 miles on the car
since the replacements, meaning the car was in good shape. The claimant
subsequently purchased the vehicle, however faults soon developed. As per warranty,
the defendant made some repairs, yet with the development of more faults it became
apparent that the car had in fact travelled many more miles than originally believed
since the replacement of parts. The claimant thus brought an action against the
defendant for breach of contract and seeking damages. In response, the defendant
asserted he had made an innocent misrepresentation.

Issue

Whether the defendant’s statement as to the quality of the vehicle could be deemed a
term of contract given his expertise as a prestige car dealer.

Held

The Court found for the claimant, viewing the statement as a contractual term. They
determined that as the defendant had greater expertise, as a car dealer, the claimant
was reasonably entitled to rely upon a representation from them regarding the subject
of their expertise.
Oscar Chess v Williams (1957)

Facts

The defendants sold a Morris car to the claimants, who were motor traders, for £290.
The defendants provided a copy of the vehicles first registration indicating that the car
was first registered in 1948. Some eight months later the claimants became aware that
the car had actually been registered in 1939 and was therefore only worth £175. The
defendant honestly believed that the car was a 1948 model. The claimants claimed
damages for breach of contract.

Issues

The issue in this context was whether the statements given by the defendants
constituted a warranty as to the age of the car.

Decision/Outcome

The Court of Appeal found that the defendants’ comments did not constitute a
warranty. More importantly, the court set out a number of considerations that should
be made when assessing whether a statement is a warranty. (1) Where an assumption
is fundamental to a contract, it does not mean that it is a term of the contract. (2) The
term warranty means a binding promise as well as a subsidiary, non-essential, term of
a contract. (3) A warranty must be distinguished from an innocent misrepresentation.
(4) Whether a warranty is intended must, judged objectively, be based on the parties’
words and behaviour. (5) Where one party makes a statement, which should be within
his own knowledge, but not the knowledge of the other, it is easy to infer a warranty.
If the party states that it is not within his knowledge and is information passed from
another, a warranty is less easily inferred. (6) An oral representation repeated in
writing suggests a warranty, but the issue is not conclusive. Neither is the fact that it is
not stated in writing.