Bisset v Wilkinson [1927] AC 177 is a landmark contract law case concerning the distinction between statements of fact and opinion in the context of misrepresentation. The case was decided by the Privy Council, which was the final appellate court for New Zealand at the time. Although the ruling is not binding in English contract law, it has been cited and applied in numerous cases in England and Wales, making it a highly persuasive authority. The decision in Bisset v Wilkinson established the principle that a mere misstatement of opinion, if made honestly and fairly, does not constitute a misrepresentation that would justify rescinding a contract.
Facts of Bisset v Wilkinson
In May 1919, Mr. Bisset entered into a legally binding contract to sell two adjacent blocks of farmland in New Zealand to Mr. Wilkinson for a sum of £13,260. The land comprised 834 and 141 hectares (2,062 and 348 acres, respectively). During negotiations, Bisset informed Wilkinson that “with a good six-horse team,” he believed the farmland would be capable of supporting 2,000 sheep.
After two years of attempting to use the land for sheep farming, Wilkinson found that the land could not support 2,000 sheep unless very careful land management techniques were implemented. He subsequently sought to rescind the contract on the grounds of misrepresentation, arguing that Bisset’s statement regarding the land’s capacity was false and had induced him to enter into the contract.
Legal Issue
The central issue in Bisset v Wilkinson was whether Bisset’s statement about the land’s capacity constituted a statement of fact or was merely an expression of opinion. If the statement were considered a factual representation, it could form the basis of a misrepresentation claim, potentially allowing Wilkinson to rescind the contract and claim damages. However, if the statement was deemed an opinion, it would not have legal standing as a misrepresentation.
Arguments Presented
Wilkinson’s argument centered around the claim that Bisset’s statement was a factual assertion about the land’s productivity, which had induced him into purchasing the farmland. He argued that, since the statement was incorrect, the contract should be set aside for misrepresentation.
Bisset contended that his statement was merely an estimate based on his personal opinion and limited farming experience. Furthermore, both parties were aware that the land had not previously been used for sheep farming, making any assertion about its capacity speculative rather than factual.
Judgment and Reasoning in Bisset v Wilkinson
The Privy Council, with Lord Merrivale delivering the leading Bisset v Wilkinson judgment, ruled in favour of Bisset. The court held that:
Statement as an Opinion
The statement made by Bisset regarding the farmland’s capacity was an expression of opinion rather than a representation of fact. This was based on the shared understanding that neither party had experience using the land specifically for sheep farming.
Since Bisset had never used the land for sheep farming, his statement could not reasonably be considered an authoritative factual representation.
Knowledge of the Parties
Both Bisset and Wilkinson were aware of the speculative nature of the statement. Wilkinson was not misled in a manner that would justify rescission of the contract.
Burden of Proof
Wilkinson failed to prove that, with proper management, the land was incapable of sustaining 2,000 sheep. This failure further weakened his claim that the statement constituted a misrepresentation.
The Privy Council’s decision was unanimous, with Viscount Dunedin, Lord Atkinson, Lord Phillimore, and Lord Carson concurring with the judgment.
Conclusion
The case of Bisset v Wilkinson [1927] AC 177 is a significant authority in contract law on the issue of misrepresentation. It reinforces the principle that mere expressions of opinion, made honestly and without an intention to deceive, do not constitute actionable misrepresentation. The decision underscores the importance of differentiating between factual statements and subjective estimates in contract negotiations.
In summary, the ruling in Bisset v Wilkinson establishes that:
- Honest opinions, even if incorrect, do not form the basis for rescission.
- Buyers should exercise due diligence before entering into contracts.
- Misrepresentation requires an assertion of fact that is false and materially relied upon.
This case continues to influence contract law decisions in the UK, shaping how courts interpret statements made during negotiations and transactions.
