Legal Principle: A contract obtained by misrepresentation is voidable at the option of the buyer. Factual Situation: A company’s prospectus contained a representation that the company had been authorized by a special Act of Parliament to run trans by steam or mechanical power. The authority to use steam was, in fact, subject to the approval of the board of trade, but no mention was made of this. The board refused consent and consequently the company was wound up. The plaintiff having bought some shares, sued the directors for fraud. Issue: Are the directors liable? Decision: