C. The Measure of Relief

• Author: John D. McCamus
• Profession: Professor of Law. Osgoode Hall Law School, York University
• Pages: 695-696

Page 695

The transformation from representation to term brings the representation into the remedial context of remedies for breach of contract. Thus, breach of a promise that the stated fact is true will give rise to a claim for damages calculated in the expectancy measure of relief. In the usual case, then, the plaintiff misrepresentee would be entitled to recover an amount of money calculated so as to place the plaintiff in the position he would have been in if the promise of the truth of the statement had been fulfilled.²²The difference between the contractual measure of damages and the damages that might be available in tort for fraudulent or negligent misstatement can be quite striking, as may be illustrated by the facts of Leaf v. International Galleries.²³In this case, the plaintiff buyer bought a painting from the defendant for eighty-five pounds. It was a painting of Salisbury Cathedral, represented by the seller to be by the artist Constable. When, in due course, the painting was discovered by the buyer not to be a Constable, the buyer sought rescission of the contract, a claim that failed on grounds of lateness. The claim in tort for misrepresentation, however, if it had been available, would have yielded damages calculated by subtracting from eighty-five pounds the value of the painting actually received. The plaintiff would be placed back in his pre-contract position. However, if the representation were considered to be a collateral warranty sounding in contractual damages,

Page 696

the expectancy measure of relief would yield whatever (presumably impressive) amount was needed to buy an actual Constable painting of Salisbury Cathedral, less eighty-five pounds.

On the other hand, if the undertaking is construed as being one to provide truthful or carefully researched information and the provision of truthful or carefully researched information would have persuaded the misrepresentee to refuse to enter the agreement, the tort and contractual measures may coincide. Thus, in Esso Petroleum Co. v. Mardon²⁴ itself, if the implicit undertaking that the estimate of the volume of business or through-put had been carefully done were true, it would reveal that the proposed transaction was not a profitable one and, accordingly, the prospective tenant would have refused to enter the lease. Thus, the contractual measure of relief would place the tenant in the position he would have been in if he had not entered the lease. To accomplish...