Bisset v Wilkinson [1927] AC 177

Facts

• The dispute concerned the sale of land in New Zealand from Bisset (claimant) to Wilkinson (defendant) for the purpose of sheep farming.
• Bisset stated to Wilkinson that the land, if properly worked, could support 2,000 sheep.
• Both parties knew Bisset had not previously farmed sheep on the land; neither had empirical experience of its carrying capacity.
• After purchase, Wilkinson failed to make payments, leading Bisset to sue for unpaid amounts.
• Wilkinson counterclaimed for rescission on grounds of misrepresentation, centering his claim on Bisset’s statement about the land’s sheep-carrying capacity.

Issues

1. Whether Bisset’s statement regarding the land’s potential to support 2,000 sheep was an actionable misrepresentation.
2. Whether the statement constituted a statement of fact or was merely a statement of opinion.
3. Whether a misrepresentation claim may succeed in the absence of special knowledge supporting the statement.

Decision

• The Privy Council held that Bisset’s statement was not an actionable misrepresentation.
• The statement was deemed to be an expression of opinion, not fact, given both parties’ acknowledgment that Bisset lacked sheep farming experience on the land.
• The court emphasized the contextual understanding that the statement reflected a non-expert estimation rather than a factual guarantee.
• The counterclaim for misrepresentation failed, and Bisset’s claim for recovery of unpaid sums was not defeated by misrepresentation.

Legal Principles

• A statement of opinion, understood as such and made without special knowledge, does not amount to actionable misrepresentation.
• Actionable misrepresentation requires a false statement of past or present fact which induces entry into a contract.
• The distinction between fact and opinion depends on context and the representor’s special knowledge.
• Where a party with special knowledge makes a statement, as in Esso v Mardon [1978] QB 801, such a statement may be treated as fact and lead to liability if inaccurate.
• Remedies for misrepresentation depend on its nature—fraudulent and negligent misrepresentations may result in damages or rescission; innocent misrepresentation generally leads only to rescission, subject to limitations.

Conclusion

Bisset v Wilkinson [1927] AC 177 confirmed that statements of opinion, absent special knowledge, are not actionable misrepresentations. The case drew a clear distinction between fact and opinion, clarifying that only false statements of fact which induce a contract may found a misrepresentation claim, thereby guiding contractual negotiations and remedies.