The defendant’s son was buying a farm, and sought from the plaintiff bank a substantial loan towards the purchase, on the security of the farm. The defendant signed an unsecured guarantee limited to £110,000. When the son defaulted, the defendant refused to pay under the guarantee, on the basis that its scope was wider than he had understood at the time he signed. The guarantee was the bank’s standard all monies guarantee; the defendant alleged that he had understood that he was signing only a guarantee limited to the money borrowed for the purchase of the land—i.e., the balance of the loan account. The bank sought to hold the defendant liable under the guarantee not only in respect of the loan account but also for the son’s failure to repay an overdraft and a loan advanced by way of working capital for the farm.

In the Court of Appeal, the father relied on two grounds—non est factum and negligence or breach of duty by the bank. The Court of Appeal4 allowed the father to escape liability under the guarantee. However, the judges were not unanimous on all issues. Purchas, L.J., held that the father had established non est factum, but (as a second ground) also held that there was a negligent misrepresentation by the bank. Woolf, L.J., found that there was a misrepresentation, but was not satisfied that non est factum had been established. Sir Edward Eveleigh preferred misrepresentation as a ground of decision, but then added a further approach, based on