1. Misrepresentation in SPA Disputes
Undergrowth, Boilerplate and Statutory Control
David Drake

2. Undergrowth?
Would-be claimants (and their lawyers) in misrepresentation claims tend to find themselves –
“… threshing through the undergrowth and finding in the course of negotiations some (chance) remark or statement (often long forgotten or difficult to recall or explain) on which to found a claim …”
Inntrepreneur Pub Co v East Crown Ltd [2000] 2 Lloyd’s Rep 611, [7] per Lightman J

3. Boilerplate (Acknowledgement of) No-Reliance clauses
Designed to prevent misrepresentation claims
Entire Agreement clauses
Designed to prevent collateral warranty claims

4. No-Reliance clauses: the common law
Evidential estoppel?
Watford Electronics v Sanderson [2001] All ER (Comm) 696 CA
Contractual estoppel!
First Tower Trustees Ltd v CDS (Superstores International) Ltd [2019] 1 WLR CA

5. First Tower: “contractual estoppel”
Parties can bind themselves to a particular state of affairs, present or past, even if they know it to be untrue, by “contractual estoppel” ([47]-[48]).
Does appropriating the term “estoppel” confuse matters? Binding force is dependent on promise, rather than reliance.
Leggatt LJ “question[ed]” ([94]) whether a clause by which one party “acknowledges” absence of reliance sufficiently clearly expresses such an agreement – but proceeded on the basis of the “different view” taken in Springwell Navigation Corp v JP Morgan Chase Bank [2010] 2 CLC 705 CA.

6. Statutory Control
Misrepresentation Act 1967 s 3(1) – applies to non-consumer contracts:
“If a contract contains a term which would exclude or restrict—
(a) any liability to which a party to a contract may be subject by reason of any misrepresentation made by him before the contract was made; or
(b) any remedy available to another party to the contract by reason of such a misrepresentation,
that term shall be of no effect except in so far as it satisfies the requirement of reasonableness as stated in section 11(1) of the Unfair Contract Terms Act 1977; and it is for those claiming that the term satisfies that requirement to show that it does.”

7. First Tower: application of s 3(1)
Whether s 3(1) applies is a question of statutory, not (just) contractual interpretation: First Tower, [49]-[57]
Is there an exclusion or restriction of liability?
Prima facie requires a ‘but-for’ test: First Tower, [41]

8. First Tower: qualified representations
Qualification of content:
“The clock reading [on a car being sold] is 20,000 miles, but I have no knowledge whether the reading is true or false”
Attempts to negate status as an actionable representation:
“I have serviced the car since it was new, it has had only one owner and the clock reading is accurate. … but those statements are not statements on which you can rely.”
‘No-Reliance’ clauses are characteristically in the latter category

9. First Tower: “Primary obligations” clauses
Does a provision that meets the ‘but-for’ test simply “delimit the primary obligations” under the contract [42]-[44]?
When, if at all, should the term “basis clause” be used?
In relation to misrepresentation, a term in the very contract induced by the misrepresentation that meets the ‘but-for’ test will always be an exclusion clause: [97]-[98], [109] per Leggatt LJ

10. Statutory Control Reigns Supreme?
Theoretically possible, but practically unlikely, to outflank s 3(1) by means of an evidential estoppel: First Tower, [59], [61]
Party would probably have to overtly endorse the statement that they are not relying on any pre- or non-contractual representations
Why? Because the counterparty must genuinely act on that endorsement, and the court must treat the party as having intended them to do so: Watford Electronics v Sanderson [2001] All ER (Comm) 696 at [39]-[41]

11. Entire Agreement clauses: Lightman J rules
Clause works by “denud[ing] what would otherwise constitute a collateral warranty of legal effect” – Inntrepreneur, [7]
Endorsed obiter in MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2018] 2 WLR 1603 SC, [14]
Appears fatal for any collateral warranty argument short of a parallel agreement completely independent of the main contract, and supported by its own consideration