Court case[1936] Ch 575

In January 1934 a doctor negotiating the sale of his medical practice told the buyer that it was worth about 2,000 pounds a year. The statement was true. By the time the contract was signed in May, the doctor had fallen seriously ill and the practice had almost disappeared, its takings falling to a few pounds a week. He said nothing about the change. The buyer discovered the position on taking over and sought rescission.

The Court of Appeal (Lord Wright MR and Romer LJ) ordered rescission. A representation made to induce a contract is treated as continuing until the contract is concluded. If, to the representor's knowledge, it becomes untrue before then, he is bound to correct it; his silence amounts to a misrepresentation. The buyer had relied on the January figure, and the vendor's failure to update it vitiated the contract.