2. Misrepresentation Flashcards
Dimmock v Hallet
Description of the land as ‘fertile and improvable’ did not amount to representation - mere puff
Half-truths can amount to misrepresentation
McInerny v Lloyd’s Bank
Misrepresentation will only be actionable if it unambiguously has a meaning put forward by representee
Avon v Swire
For statement to be false it must not be ‘substantially correct’
West London Commercial Bank v Kitson
False statement of law is actionable
Gordon v Selico
There can be misrepresentation through conduct (concealment of dry rot)
Esso v Mardon
E’s estimated throughput of petrol station is statement of fact, since E had sufficient expertise to calculate this, and could not have reasonably believed the figure provided to M
Bisset v Wilkinson
Land had never been used as sheep farm and both parties were equally able to form opinion as to its carrying capacity
Therefore statement made by one party to another counts as statement of opinion and not a statement of fact
Wales v Wadham
No misrep when wife initially declares her intention not to marry and subsequently changes her mind
Edgington v Fitzmaurice
Statement about future intention which D knows at the time to be false can be misrep
Rule in Atwood doesn’t apply if representee relied partly on statements of misrepresentor and partly on his own investigation
Action for misrep will only succeed if it can be shown that it was at least one reason as to why C entered into contract
Keates v The Earl of Cadogan
Silence does not amount to misrepresentation
With v O’Flanagan
Silence can constitute misrepresentation where there is a continuing representation
Hood v West End Motor Car Parking
Duty to disclose that insured goods are carried on deck of ship instead of in the hold
Commercial Banking v RH Brown
Statement must be addressed to claimant
Misrepresentation possible in case of third party who makes false statement to misrepresenter
Pan Atlantic v Pine Top Insurance
Objective test to inducement – did statement relate to an issue that would have influenced the reasonable man?
If statement not found to be material, inducement cannot be inferred
Smith v Chadwick
If statement is found to be material, inducement will generally be inferred as a matter of fact
Museprime Properties v Adhill Properties
Subjective test
Open to C to prove he was induced
Or to D to prove C not induced
Horsfall v Thomas
No inducement where the representee was unaware of representation
Atwood v Small
No misrep where representee relies on his own investigation
Redgrave v Hurd
Representee under no duty to check the veracity of statement
Smith v Eric S Bush
More likely courts will find that it is reasonable for representee to check statement in context of commercial contracts
Derek v Peek
Classic definition of fraudulent misrep
- There must be proof of fraud
- Fraud is proven when it is shown that a false representation has been made
a. Knowingly
b. Without belief in its truth, or
c. Recklessly
Misrepresentation Act 1967, s 2(1)
D liable for negligent misrep, unless he can prove that (1) he had reasonable grounds to believe and (2) did believe up to time contract made that statement was true
Hedley Byrne v Heller
Negligent misstatement
Duty of care exists where there is ‘special relationship’ between parties
- It must be reasonably foreseeable by representor that representee will rely on statement
- There must be sufficient proximity between the parties
- It must be just and reasonable for the law to impose a duty
Car v Caldwall
Cald sells car to rogue, who then sold it to Car
Held: Caldwell owns car
Leaf v International Gallery
Action for recission may fail for lapse of time
Clarke v Dickenson
Recission impossible in respect of shares in partnership which was later converted into a limited liability company
Smith New Court v Scrimgeour
Measure of damages
Fraudulent - all the losses flowing from the transaction as a whole
Negligent - only the losses flowing from that specific misrep
Mitigation
- P must mitigate as soon as fraud is discovered
- Any damages awarded to P will be reduced by the value of any benefit P has acquired as a result of the contract
East v Maurer
Loss of profits can also be claimed where a business has sustained a loss as a result of a fraudulent misrepresentation
Downs v Chappell
Loss of profits cannot be claimed where there is a profit, though not as large as expected
Clef Aquitaine v Laporte
Where C can prove that more favourable transaction with D or third party would have been entered into but for D’s fraudulent misrepresentation, D can recover for his loss of profits
Royscott v Rogerson
Assessment of damages should be based on more generous measure available under tort of deceit
Contrib should not apply to negligent misrep
Gran Gelato v Richcliff
Contrib is available as defence to negligent misrep
