With v O’Flanagan  Ch 575
The plaintiff, With, contracted with the defendant Dr O’Flanagan to acquire his medical practice. The defendant had accurately represented to the plaintiff that the medical practice had takings of £2000 per annum. Dr O’Flanagan, however, became ill and the takings of his medical practice significantly reduced. He failed to disclose this information to the plaintiff. When the plaintiff took over the business and realised the low earnings, he sought to rescind on grounds of misrepresentation.
1. Whether the defendant was under an obligation to disclose the reduced earnings of the medical practice.
1. That the defendant was under an obligation to disclose the reduced earnings.
The court held that the representations on the earnings of the medical practice were made to induce the plaintiff to enter into the contract. When circumstances changed, such that the earlier representations were no longer accurate, it constitutes misrepresentation if the defendant failed to inform the plaintiff.