Holmes v Jones (1907) 4 CLR 1692

Facts: While negotiating the sale of a pastoral property, D innocently misrepresented the number of stock on it. They later informed P’s agent of the true position (and the agent verified it). The agreement and sale followed. P sought to have the contract set aside because of D’s earlier “misrepresentation”.

Held: Because D corrected their earlier misstatement, the contract had not been induced by their “misrepresentation”. It could not be set aside. It is not sufficient that D simply made a misrepresentation, but that the misrepresentation actually induced the other party to enter the contract. As the purchaser, P, was given the correct facts, they didn’t rely on the misrepresentation when entering the contract. P showed no reliance on the statement because they sent their own agent to verify cattle.