150 



FRAUDULENT CONTRACTS. 



A bond fide 

 representa- 

 tion. 



Representa- 

 tion as to 

 credit. 



Sale of goods 

 " with all 

 faults " ex- 

 cludes latent 

 defects. 



Unless there 

 be an express 

 warranty. 



An action, however, does not lie for a false representation, 

 whereby a party being induced to purchase the subject- 

 matter of the representation even from a third party, has 

 sustained damage, if the re]]resentation appear to have been 

 made bond fide under a reasonable and well-grounded belief 

 that the same was true, as the rule Caveat emptor applies («). 



A person should be careful how he gives credit to any 

 statement made by a third party as to the character and 

 ability of the person with whom he is about to deal ; be- 

 cause under 9 Geo. 4, c. 14, s. 6, " no action lies to charge a 

 person upon or by reason of any representation or assurance 

 made or given relating to the character, conduct, ability, 

 trade, or dealings of any other person, to the intent that 

 such other person may obtain credit, money or goods 

 [thereJupoD, unless such representation, &c. be made in 

 writing, signed by the party to be charged therewith." 

 The signature of an agent will not satisfy this section («/). 

 And one partner signing in the name of and by the express 

 authority of his firm will make himself only liable (z). 



It is now well settled («) that if goods are sold expressly 

 " with all faults," the seller is not bound to disclose latent 

 defects, and is therefore not liable to an action in respect of 

 them, although he was aware of them at the time of sale, 

 unless there be an express warranty against some particu- 

 lar defect, or unless some artifice or fraud was practised to 

 prevent the vendee from discerning such defects ; therefore, 

 in afi"ecting such a sale of a horse, it is best for the seller 

 to say nothing, and let the purchaser inspect the horse, and 

 so judge for himself 



So far as the description goes, there is an express war- 

 ranty against any particular defect, which is excluded by 

 that description. Accordingly, where an advertisement 

 for the sale of a ship described her as a " copper-fastened 

 vessel," adding that the vessel was to be taken " with all 

 faults, without any allowance for any defects whatsoever ; " 

 and it appeared that she was only partially copper-fastened; 

 it was held that the vendor was liable on the ground that 

 she was warranted to be copper-fastened, and that, "with 

 all faults" applies to such faults only as a copper-fastened 



{x) Shrewsbury v. Slount, 2 M.& 

 G. 475 ; 8. C.2 Scott, N. E. 588 ; 

 Sayeraft v. Creasy, 2 East, 92 ; 

 6 E. E. 380 ; Ormrod v. Suth, U 

 M. &"W. 664. 



[y) Swift V. Jewsbary, L. E., 9 



Q. B. 301, Ex. Ch., reversing S. C. 

 sub nom. Swift v. Winterbottom, 

 L. R., 8 Q. B. 244. 



[z) Williams v. Mason, 28 L. T. 

 N. S. 232; 21 W. R. 386. 



(«) Chit. Coutr. 12th ed. 503. 



