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In March 1944, Leaf paid £85 for a painting from International Galleries which was described in the contract as "One original oil painting Salisbury Cathedral by J. Constable". Approximately five years later Leaf took the painting to Christie's to put it up for auction and was informed that it was not a Constable. He returned the painting to International Galleries and requested his money back. The gallery insisted that it was a Constable and refused to give him back his money. Leaf brought an action for recission claiming there was innocent misrepresentation and that he paid money on reliance.
- Is a buyer allowed to rescind a contract in equity even though it is executed?
Denning, writing for a unanimous court, held that counsel for the appellant had claimed the wrong remedy - there should have been a claim for damages under the Sale of Goods Act, 1893. There was a mistake as to quality of the painting (not being a Constable) and thus two avenues for breach: condition and warranty. However, under the Sale of Goods Act, 1893 a person is deemed to have accepted goods "when after a lapse of a reasonable time, he retains the goods without intimating . . . he has rejected them" and a reasonable time has definitely passed in this case. If a claim for breach of condition fails (as it does) then it is necessary by implication that a claim for rescission should fail.
Evershed questions whether the court should hold to the doctrine in Seddon v North Eastern Salt Co. that an executed contract cannot be rescinded in cases of innocent representation. As the rule has stood for a long time and has not been changed by Parliament, he feels the court should not overturn it in this case. The buyer still has the article he intended to buy (a picture of the cathedral), it has just changed in quality. Further, with the great volatility of items in the art market, finding a value for restitution would be very difficult.
- If a warranty is breached then there is action in damages.
- If a condition is breached then there is action in repudiation and in damages.
- The rule in Seddon v North Eastern Salt Co. questioned.