The purchase of property normally involves formal contracts with lengthy standard terms. Somewhere hidden in those standard terms is often a clause, in which the buyer agrees that he is not relying on any representations, oral or written, made about the property before the contract was signed.

This is designed to prevent the buyer from later seeking damages or looking to get their money back if the property is not as promised.

Section 3 of the Misrepresentation Act 1967 means that such non-reliance clauses are ineffective, unless it satisfies the test of reasonableness, set out in schedule 2 of the Unfair Contract Terms Act 1977.  That schedule gives various examples of the issues that should be taken into consideration when a Judge makes a decision as to whether the clause is reasonable. In general, a Court will consider the circumstances around the misrepresentation and also the bargaining position of the buyer against that of the seller.

In the recent case of Lloyd and Another v Browning and Another [2013] EWCA CIV 1637, a non-reliance clause was held at the Court of Appeal to be effective.  The misrepresentation in that case was as to the planning status of a barn, which the buyer wished to convert into a residential property.  Lady Justice Arden, giving reasons as to why the buyer could not have legal redress, noted that the buyer was legally represented, that the buyer had engaged an architect and planning consultants and that they were aware that planning information they had been given was incomplete.  She felt that they knew the risks and decided to go forward.  She further noted that the buyer was in fact pushing the seller to exchange contracts, rather than the other way round.

It is thought that had the buyer not engaged architects and planning consultants and simply relied on the misrepresentation, they might have won their case.  In this sense, a little knowledge is dangerous.  As such, the buyer’s only redress was against his advisors for negligent advice.

Having acted for the recovery of damages in many such cases, I would recommend setting down exactly what was said in writing as soon as possible. These cases can take years to come to trial and a recent recollection carries more weight. The best way of doing so is to write a formal letter of complaint. You should seek legal advice before as to the relevant issues, before pinning your colours to the mast.