Seller Beware!

In the ordinary course, the maxim of buyer beware applies, with buyers being well advised to undertake sufficient due diligence to satisfy themselves of the value and quality of what they are buying.

The recent decision of MAN -v- Freightliner has turned this maxim, at least in part, on its head.

MAN successfully claimed against Freightliner for losses that it sustained after purchasing ERF Holdings plc ("ERF"). Freightliner was held liable for fraudulent misrepresentations made by an individual involved in the sale of ERF during negotiations despite being unaware of the fact that the representations made were fraudulent and despite the fact that the individual concerned was not one of Freightliner’s employees.