In the recent case of Cleaver and another v Schyde Investments Limited [2001] EWCA Civ 929, the Court of Appeal upheld the County Court decision that a buyer who had entered into a contract to purchase land with development potential was entitled to rescind the contract on the basis of ‘innocent misrepresentations’ made by the seller in failing to update the buyer when new planning information had come to light.
Background
Innocent Misrepresentation
Claim and counterclaim
Judgement and appeal
Reminder
Sellers and their advisors should keep in mind the continuing duty to update the buyer once it emerges that any information given in the CPSEs or additional replies to enquiries is incorrect before exchange of contracts (or completion of the transaction where no contract is being entered into).
As a result of this case, there is no guarantee that, on similar facts, condition 7.1.3 of the SCS could be relied upon in the event of innocent misrepresentation on the part of the seller.