May 2019
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S Pearson & Son Ltd v Dublin Corporation; HL 1907

References: [1907] AC 351
Coram: Lord Loreburn LC, Lord Ashbourne, Lord Atkinson, Lord Halsbury
A clause in a building contract provided that the contractor should satisfy himself as to the dimensions, levels and nature of all existing works. Did this exclude an action based on alleged fraudulent misrepresentations by the council’s engineers as to the position of an existing wall.
Held: Lord Halsbury ‘The action is based on the allegation of fraud, and no subtilty of language, no craft or machinery in the form of contract, can estop a person who complains that he has been defrauded from having that question of fact submitted to a jury.’
Lord Loreburn said: ‘I will not say that a man himself innocent may not under any circumstances, however peculiar, guard himself by apt and express clauses from liability for the fraud of his own agents.’ but the clause as a matter of construction did not cover cases of fraudulent misrepresentation. General language will not be construed to relieve a principal of liability for the fraud of an agent. Of the exemption clauses ‘They contemplate honesty on both sides and protect only against honest mistakes.’
This case is cited by:

  • Cited – HIH Casualty and General Insurance Limited and others v Chase Manhattan Bank and others HL (House of Lords, Bailii, [2003] UKHL 6, [2003] 1 All ER Comm 349, [2003] 2 Lloyd’s Law Reports 61, [2004] ICR 1708, [2003] Lloyds Rep IR 230, [2003] 1 CLC 358)
    The insurance company had paid claims on policies used to underwrite the production of TV films. The re-insurers resisted the claims against them by the insurers on the grounds of non-disclosure by the insured, or in the alternative damages for . .
  • Cited – Six Continents Hotels Inc v Event Hotels Gmbh QBD (Bailii, [2006] EWHC 2317 (QB))
    The claimant had licensed the defendant to use its trademarks in connection with the naming of their hotels in Germany. The defendants failed to pay their fees as agreed, the claimants terminated the license and now sought payment under the . .

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