Question

Peek v. Gurney is a famous case relating to

• A. Mistake
• B. Misrepresentation
• C. Fraud
• D. Frustration of contract

Hint:

For Contract Law, associate landmark English cases with the specific legal principles they established. For example, \textit{Carlill v. Carbolic Smoke Ball Co.} for general offers, \textit{Hadley v. Baxendale} for remoteness of damages, and \textit{Peek v. Gurney} for the scope of misrepresentation.

Answer 1

The Correct Option is B

To place Peek v. Gurney correctly, it helps to remember what the facts actually were. A company's promoters issued a prospectus with statements that turned out to be false. The claimant, Peek, did not buy his shares directly from the company on the strength of that prospectus; he bought them later, on the open market. When the company failed, he tried to sue the promoters. The House of Lords had to decide whether he could do so.

1. Mistake: Nobody in this case was mistaken about a shared fact underlying the contract, since Peek had no contract with the promoters at all. This rules mistake out.
2. Misrepresentation: The court's answer turned on the scope of a representation, namely that a prospectus is meant to induce the original subscribers to take shares from the company, and once that allotment is complete, the prospectus has done its job. A buyer in the secondary market falls outside the circle of people the statement was addressed to. That reasoning, about who counts as a person entitled to rely on and sue over a representation, is the defining contribution of this case to the law, which is why it sits under misrepresentation.
3. Fraud: The false statements here were made knowingly, which does carry the flavour of fraud, but the ruling is not remembered for settling whether fraud occurred. It is remembered for the separate, narrower point of to whom the statement can be treated as having been made.
4. Frustration of contract: There was no later event making performance impossible; the whole dispute predates any contract between Peek and the promoters, so frustration has no role here.

Since the entire ruling revolves around who a company's public statement is legally addressed to, and that is a misrepresentation question, the correct classification is Misrepresentation.

Answer 2

A useful way to classify an old case like this is to ask what a modern student would cite it for if writing an essay today. That test points clearly to one of the four options here.

1. Mistake: This doctrine requires an error about a fact both sides treated as fundamental to their bargain. Peek and the promoters never had a bargain between them in the first place, so there is no room for a mistake analysis.
2. Misrepresentation: Textbooks place Peek v. Gurney under this heading because it answers a foundational question in misrepresentation law: does a false statement made in a company's prospectus travel with the shares to every later buyer, or only to the original subscriber it was addressed to? The House of Lords limited it to the original subscriber, and that limitation on who may sue over a representation is the case's lasting contribution to this branch of law.
3. Fraud: It is true that the underlying conduct, issuing statements known to be false, is fraudulent in character, and some accounts of the case do discuss it alongside deceit. But the legal proposition students take away from the case is about the scope of reliance on a representation, not a ruling on the ingredients of fraud itself.
4. Frustration of contract: This doctrine is about a valid contract becoming impossible to perform later. Nothing in the facts involves a contract between the parties breaking down after formation, so this option has no connection to the case.

Given that the case is built entirely around defining who a public representation is addressed to, and for how long that inducement lasts, it is correctly filed under Misrepresentation.

Therefore, the correct answer is Misrepresentation.