• misdescription : this means that the seller is unable to transfer to the buyer the property exactly as described in the contract. Under the Standard Conditions: ‘Where there is a material difference between the description or value of the property, or any of the chattels included in the contract, as represented and as it is, the buyer is entitled [merely] to damages’ (7.1.2). Note that an error or omission only entitles the buyer to rescind the contract (and so defeat the seller’s claim for specific performance, or forfeiture of the deposit) if (i) it ‘results from fraud or recklessness’, or (ii) if the buyer ‘would be obliged to his prejudice, to accept property differing substantially ‘in quantity, quality or tenure’ from what the ‘error or omission had led him to expect’ (7.1.3). Note that both these provisions are an exclusion of liability, and therefore they will only be effective if they satisfy the statutory requirements of ‘reasonableness’. The mere fact that use of the Standard Conditions is commonplace does not necessarily mean that a court will find the condition is reasonable. Accordingly the court would make its decision on the facts of the particular case (eg if there was a real inequality of bargaining power). But, in most instances the conditions are likely to be held to be reasonable (especially since the buyer will have been legally advised). What this means is that usually a buyer can only rely upon misdescription as a total defence to the seller’s claim if it can establish one of the two situations in 7.1.3. Much will depend upon whether the misdescription is ‘substantial’.
• misrepresentation : equity allows a buyer to rescind a contract if there has been misrepresentation, due to a material false statement of fact by the seller which induced the buyer to enter into the contract. But, this does not mean that the defaulting buyer can simply trawl through all the pre-contract representations in the hope of finding one that turns out not to be true. Misrepresentation will only apply if it actually induced the buyer to enter into the contract. In addition, most contracts contain non-reliance clauses (although, as exclusion clauses, these will be subject to the statutory test of ‘reasonableness’ – see above). Note that if a buyer wants to rescind on the grounds of misrepresentation, there is no need to prove fraud – innocent misrepresentation is sufficient. However, rescission is an equitable right and can therefore be lost by the buyer (eg if he affirms the contract; if he delays in seeking rescission; or if it is no longer possible to restore the party to their pre-contract situation). In any event, s2(2) Misrepresentation Act 1967 says that if a misrepresentation was not made fraudulently, and the buyer has subsequently rescinded the contract, the court has a discretion to declare the contract subsisting and award damages in lieu of rescission if ‘it would be equitable to do so, having regard to the nature of the misrepresentation and the loss that would be caused by it if the contract were upheld’. Thus, the buyer’s rescission may be ineffective, and he may merely get compensation for the misrepresentation.

For more on this topic see [2008] 217 Property Law Journal 18 .