Esso Petroleum v Mardon [1976] QB 801:

Material Facts:

Mardon, upon being informed by an expert representative of Esso Petroleum Company that a petrol site would produce 200,000 gallons, entered into a tenancy agreement with Esso Petroleum Company for the site. Subsequently, Mardon discovered that only about 70,000 gallons could be obtained from the site and that the earlier projection of 200,000 was inaccurate. Since the value of the rent agreement was based on the estimated number of gallons, the claimant could not operate the petrol site profitably.

Issues:

1. Whether or not the projection that the site would produce 200,000 gallons of petrol was a warranty.

Holding:

1. That the projection was a warranty.

Ratio Decidendi:

Per Lord Denning, Esso Petroleum had expertise and special knowledge in measuring the worth of the petrol site and were in a much better position than Mardon to make a projection on the site. That if Esso Petroleum makes a forecast or projection and intends that the Mardon should rely on such a forecast, it can be interpreted as a warranty that the forecast or projection is reliable.

Comments :

Since Esso Petroleum was considered an expert, the court will consider the fact of the information being true as a term of the contract.