This case follows the court of appeal`s recent decision in J N Hipwell – Son/Ms Claire Szurek (2018) EWCA Civ 674, which found that a full agreement clause, appropriate to the circumstances, could be challenged. The question of whether a declaration of non-confidence is a disclaimer for misrepresentation and, as such, subject to the adequacy verification provided for in Section 3 of the Misrepresentation Act (section 3). This debate was resolved in 2010 with the decision of the Springwell Court of Appeal. It is now clear that declarations of non-confidence may constitute an exclusion clause: if the clause is a clause that excludes liability for misrepresentation instead of defining the conditions under which the parties conduct their activities, Section 3 applies. However, the application of this test in practice proved difficult and the subsequent approach created uncertainties. The decision of the Court of Appeal in First Tower Trustees Ltd/CDS (Superstores International) Limited resolves this uncertainty. There have been several cases where a party, defending against the liability of a right to misrepresentation, has attempted to invoke a full contractual clause that denies contractual force to statements other than those contained in the final agreement. The judge referred to the master`s opinion that the use of the concept of “representations” in this case, unlike that of AXA Sun Life Services Plc v Campbell Martin Ltd [2012] Bus LR 203, where the court found that a similar clause was not effective in excluding misrepresentations. In this case, according to the master, the term was used alongside words such as “correspondence,” “negotiations” and “insurance,” which might include facts relied upon during the negotiations, whereas at AXA all the words were “obvious contractual in nature.” The Court of Appeal upheld the trial decision and confirmed that the disconfidence clause was an exclusion clause in Section 3. The approach taken by the court was very simple: would the owner have been held because of misrepresentation under the Law on Misrepresentation, but for the clause? The answer was yes. At first glance, therefore, the clause worked to exclude liability and there was no evidence to suggest anything else. The fact that the clause functioned as a contractual Estoppel (which prevents the tenant from arguing that a representation took place because the tenant had accepted that nothing was considered a representation said by the landlord) does not change the difference. Section 3 was used.
The adequacy assessment was therefore applied. The owner had argued that the clause was appropriate, given that the parties were legally represented, had the same bargaining power and the parties did not have contracts on the landlord`s standard terms. The judge accepted these facts but did not find them conclusive. The judge recognized the importance of a pre-contract investigation in the area of promotion by declaring the clause inappropriate; If the owner has the right to exclude liability for these insurances, the important function of responding to pre-contract requests would become worthless.
