Agent – Warranty – Misrepresentation – Respondent agent making contract with third party misrepresenting name of principal – Appellant identifying principal – Appellant capable of establishing correct name – Court finding respondent not liable for breach of warranty of authority or personally on contract – Appeal dismissed
The respondent, as agent for MICL, had commissioned the appellant firm of chartered surveyors to prepare a valuation appraisal in respect of a development site. The appellant wrote to MICL setting out the basis on which it would undertake the valuation but erroneously referred to MICL as MIL. The respondent signed above the rubric “For and on behalf of MIL” and added the words “as agent”. In other documents, the appellant again misspelt MICL’s name.
The appraisal fee was not paid and the appellant brought a claim against the respondent. The question arose as to whether an agent who misrepresented the name of his principal in the course of making a contract with a third party attracted either liability for breach of warranty of authority or personal liability on the contract in circumstances where the principal was none the less identified and its correct name could be established. The county court ruled that it could not and dismissed the appellant’s claim to recover £70,500 from the respondent, as the agreed cost of preparing the appraisal. The appellant appealed.
Held: The appeal was dismissed.
The respondent had made it clear that he was acting only as agent on behalf of the entity that was negotiating to purchase the site and there had been no reason to believe that he was not. It had not therefore been demonstrated that the respondent had breached his warranty of authority. The respondent had misrepresented the name of his principal, but he had not warranted the accuracy of the name given, in the sense of guaranteeing that it was correct. The warranty that the respondent had given was as to the fact of his agency, not as to the accuracy of the name that he attributed to his principal.
The respondent had identified and named his principal in a manner that had been adequate for all practical purposes and it was neither a sensible nor a necessary analysis for the respondent to be regarded as having warranted, in the sense of guaranteed, the accuracy of the name supplied. The appellant could have enquired as to the correct title of the principal that the respondent had identified: AMB Generali Holding AG v SEB Trygg Liv Holding AB [2005] EWCA Civ 1237; [2006] 1 Lloyd’s Rep 318 considered.
An essential element in the creation of the unilateral contract for breach of which the third party might sue where an agent was shown not to have had the authority that he represented himself to have had was the inducement of the third party to act in a manner in which it would not have acted had that representation not been made. In the instant case, the judge’s findings made it clear that no representation on the part of the respondent as to the name of his principal had induced the appellant to act in a manner in which it would otherwise not have acted.
Furthermore, the appellant had not attempted to show that the respondent did not have the authority that he warranted or that he had not been acting as agent. There was no basis on which the respondent could be held under a personal liability to the appellant.
Edward Denehan (instructed by Freeman Box) appeared for the appellant; Mark Tempest (instructed by Haldanes Solicitors & Notaries, of Stevenage) appeared for the respondent.
Eileen O’Grady, barrister
