Redgrave v Hurd (1881) 20 Ch D 1

Facts: P was induced to purchase part of D’s legal practice by D grossly overstating its earnings. P had been given an opportunity to examine the accounts and, had he done so, he would have discovered the true earnings (instead, he relied on the D’s statement). When P discovered they were untrue, he sought to rescind the contract.

Held: P succeeded. He had been misled by D’s representation and, having thus been induced to enter into the contract, he was entitled to avoid it. The purchaser’s opportunity to inspect the documents did not prevent him from relying on the misrepresentation; mere opportunity is not sufficient. Inducement is disproved where the representee actually knew that the statement was untrue or did not act relied upon the statement.

Ratio: The mere fact that a party has the opportunity of investigating and ascertaining whether a representation is true or false is not sufficient to say the misrepresentation induced the party.