The doctrine of election

Tim Fletcher

Again at the risk of stating the obvious, there could not have been any actual agreement between the parties if one party was mistaken as to the facts as a result of a misrepresentation. Consequently, there was no contract from the beginning.

The doctrine of election arises in this setting. The 'innocent' party can choose to enforce the contract notwithstanding the
misrepresentation, or cancel it. Clearly these remedies are mutually exclusive, most obviously because the remedy of enforcement asks the court to confirm the existence of the contract, while cancellation asks for a statement that the contract never existed in the first place. The choice of one necessarily implies the abandonment of the other.

In the 1981 appeal case of Feinstein v Niggli, this choice of remedy is framed as a waiver where the innocent party electing to uphold the contract is said to have waived the right to cancel it, the two remedies being mutually inconsistent. It is up to the fraudulent party to prove that the innocent party has waived its right to cancel and the onus is stringent. They must at least show that the innocent party knew of the facts constituting the misrepresentation when the choice was made to cancel or enforce the contract.

Curiously, and despite this, the innocent party may employ the 'double-barrelled remedy' in that they may ask for specific
performance, together with a request for cancellation and damages, the latter subject to the defendant not complying with
the court's order of specific performance within a certain time.

Be clear on what you want achieve

The remedies are not truly inconsistent as the cancellation is conditional on the order of specific performance proving ineffective and then only within a specified period.

The election will also not necessarily be binding where, subsequent to the choice being made, an important fact comes to the knowledge of the innocent party which impacts on the foundations of that choice. Murray J in Clarke Brothers & Brown (1913) Ltd v Truck & Car Co Ltd decided in 1952 stated the principle as follows "...when [the] right to one or other of particular remedies on ...breach is dependent upon some condition or fact which has to be ascertained at a later period, [the elector] does not forfeit his claim to one remedy by mere claim of another.

"In 1961 in United Dominions Corporation (Rhodesia) Ltd v Van Eyssen, Van Winsen J states the principle event more succinctly: "It is of the essence of the doctrine of election that the party whom it is sought to hold to an election is fully aware of the facts, and is therefore in a position to make an election: [if not,] then he cannot at the same time approbate and reprobate the contract."

So, when heading to court with a claim based on misrepresentation, be clear on what you want achieve from the start. If you elect to uphold the fraudulent contract, the opportunity to change your mind later (and cancel it) is very rare. The 'double-barrelled remedy' must be claimed at the outset. Relying on an undiscovered fact popping up later is hardly a reliable strategy. The court wants to know what you are asking of it without ambiguity. Decide this before you begin.