Bisset v. Wilkinson

[1927] Appeal Cases 177Privy Council (on appeal from New Zealand)1927Law of Contract I

Rule established

A statement of opinion or belief, as distinct from a statement of fact, does not amount to actionable misrepresentation, even if it turns out to be incorrect, provided it was honestly made.

Facts

Bisset (seller) sold two blocks of farmland in New Zealand to Wilkinson (buyer)
During negotiations, Bisset stated that the land would carry 2,000 sheep if worked properly by a good six-horse team
Bisset had never used the land for sheep farming; this was known to both parties
The land proved unable to sustain 2,000 sheep
Wilkinson sought rescission of the contract for misrepresentation

Issue

Whether a statement about the future capacity of land, made by a seller who had no experience farming it, constitutes a statement of fact (actionable misrepresentation) or merely a statement of opinion (not actionable)?

Held

The Privy Council held for the seller (Bisset), no misrepresentation
The statement was an honest expression of opinion, not a statement of fact
Both parties knew the seller had never farmed sheep on this land: the statement was understood by both as an estimate, not a guarantee
A statement of opinion or belief does not ground an action for misrepresentation even if it turns out to be wrong
Rescission was refused

Ratio Decidendi

For a statement to constitute actionable misrepresentation, it must be a statement of existing fact, not merely an expression of opinion, belief, or future expectation. Where the speaker has no special knowledge or experience regarding the subject, and this is known to the other party, any statement made is understood as an opinion. An honest opinion does not become a misrepresentation merely because it proves inaccurate.

How to use it in an exam

Core authority for the distinction between statement of fact (actionable) and statement of opinion (not actionable)
Key qualifier: where the speaker has special knowledge, an apparent "opinion" may be treated as a statement of fact (Smith v. Land & House Property Corporation [1884])
Indian equivalent: Section 18 ICA defines misrepresentation as "positive assertion... not warranted by information": an honest opinion honestly formed falls outside this
Problem questions: "A tells B that land is worth Rs X": is this opinion or fact? Context determines.
Contrast with Derry v. Peek (fraud) and Smith v. Land & House (expert opinion = fact)

Source

Source: [1927] AC 177

This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.