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Doyle v Olby

[1969] 2 QB 158

Case summary last updated at 02/01/2020 15:13 by the Oxbridge Notes in-house law team.

Judgement for the case Doyle v Olby

 P was induced to buy D’s business by false representations as to profits and an undertaking that D would not open a new business within a ten mile radius, which he later did. P lost money spent trying to make the business work and later sold the business but was left with liabilities for £4000. CA held that damages for deceit (as opposed to breach of contract) was all the damage directly flowing from the tortious act of fraudulent inducement and that remoteness (i.e. reasonable foreseeability) does not apply to deceit claims. Only P’s own acts could render a claim too remote. The plaintiff's position before the fraudulent inducement should be compared with his position at the end of the transaction. As in the instant case the plaintiff had been tricked into buying a business which he would otherwise not have bought at all, the court should award him his overall loss up to his final disposal of the business, less any benefits he had received. 
Lord Denning MR: It would be v unfair for a fraudster to be able to say they should not be liable for the loss they have caused simply because the loss was not reasonably foreseeable, A fraudster should bear the cost of the loss he imposes and so all damages caused are recoverable. The distinction between breach of contract and tort of fraud is that in the former you are trying to put P in the position as though the contract had been fulfilled, whereas in the latter you are trying to put P in the position as though the fraud had never happened (just because the latter is a negative and the former is a positive does not explain why fraud should not have a remoteness requirement). 

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