March 7, 2014

You can rely on non-reliance clauses

The case details Lloyd and others v Browning and another

Before entering into the contract, the seller (Browning) verbally informed the buyer (Lloyd) that the property had planning permission for development that included an extension. After the purchase, Lloyd discovered that this planning permission did not grant permission for an extension and claimed against Browning for misrepresentation.

The contract between the parties included a clause that prevented the buyer from relying on any pre-contractual statements made by the seller but preserved the buyers ability to rely on written statements in replies to pre-contract enquiries and solicitors' correspondence.

The Court of Appeal ruled that it was fair and reasonable to include such a clause in the contract. As the statement was not made by either of the methods referred to in the non-reliance clause, the buyers couldn’t rely on these verbal statements made to them.

How does this affect me?

This case is doesn’t make new law. If the buyers had requested that their solicitor confirm this oral statement, the outcome could have been very different.

Non-reliance clauses are standard in any commercial property contract. If you’ve been told anything by the seller, you should always get these facts confirmed in writing by the other party’s solicitor

If you would advice about non-reliance clauses, misrepresentation or any other issue relating to your property contract contact Louise Carver in our Commercial Property team on 01225 730 139 or email [email protected].

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