Thomas Witter Ltd v TBP Industries

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Thomas Witter Ltd v TBP Industries is a 1996 High Court case about misrepresentation in contract. TBP Industries misrepresented two points when selling a carpet company to Thomas Witter Ltd: (1) there would be a special one-off expense of £120,000 in the accounts, and (2) the bi-annual expense of producing pattern books would be spread over two years instead of being written off immediately. The sale contract said the buyer had not been induced by any representation and included a limitation clause requiring written notice by 1 January 1992 for liability to arise.

The buyer sued for negligent misrepresentation. TBP tried to rely on the contract provisions to avoid liability. The judge, Jacob J, held that rescission (undoing the contract) is not possible where the parties cannot be restored to their pre-contract positions. However, he also discussed a view voiced by the Solicitor General that damages could be awarded under section 2(2) of the Misrepresentation Act 1967 even when rescission is no longer possible, provided there had once been a right to rescind.

This suggests that damages for misrepresentation might be recoverable even if rescission is blocked now, if there was a past right to rescind. The decision has been questioned in later cases, such as Floods of Queensferry Ltd v Shand Construction Ltd and Government of Zanzibar v British Aerospace (Lancaster House) Ltd, where judges questioned the weight of the Solicitor General’s remark.