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Inducement
Last updated: 21-Jun-2015

Per Buller J in Pasley v Freeman (1789) E.3 T.R.51:

And if a man will wickedly assert that which he knows to be false, and thereby draws his neighbour into a heavy loss, even though it be under the specious pretence of serving his friend, I say ausis talibus istis non jura subserviunt.

In Brownlie v Campbell (1879-80) L.R. 5 App. Cas. 925, Lord Blackburn said:

…when a statement or representation has been made in the bona fide belief that it is true, and the party who has made it afterwards comes to find out that it is untrue, and discovers what he should have said, he can no longer honestly keep.

And in the same case Romer LJ stated that:

If A with a view to inducing to enter into a contract makes a representation as to a material fact, then if at a later date and before the contract is actually entered into, owing to a change of circumstances, the representation then made would to the knowledge of A be untrue and subsequently enters into the contract in ignorance of that change of circumstances and relying upon that representation, A cannot hold to the bargain. There is ample authority for that statement and, indeed, I doubt myself whether any authority is necessary, it being, it seems to me, so obviously consistent with the plainest principles of equity.

In Smith v Chadwick (1884) 9 App Cas 187, at page 196 Lord Blackburn said:

I do not think it is necessary, in order to prove [damage], that the plaintiff should always be called as a witness to swear that he acted upon the inducement. At the time when Pasley v Freeman was decided, and for many years afterwards he could not be so called. I think that if it is proved that the defendants with a view to induce the plaintiff to enter into a contract made a statement to the plaintiff of such a nature as would be likely to induce a person to enter into a contract, it is a fair inference of fact that he was induced to do so by the statement.


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