2. Misrepresentation

Question 1

Dimmock v Hallet

Answer 1

Description of the land as ‘fertile and improvable’ did not amount to representation - mere puff

Half-truths can amount to misrepresentation

Question 2

McInerny v Lloyd’s Bank

Answer 2

Misrepresentation will only be actionable if it unambiguously has a meaning put forward by representee

Question 3

Avon v Swire

Answer 3

For statement to be false it must not be ‘substantially correct’

Question 4

West London Commercial Bank v Kitson

Answer 4

False statement of law is actionable

Question 5

Gordon v Selico

Answer 5

There can be misrepresentation through conduct (concealment of dry rot)

Question 6

Esso v Mardon

Answer 6

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

Question 6

Bisset v Wilkinson

Answer 6

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

Question 7

Wales v Wadham

Answer 7

No misrep when wife initially declares her intention not to marry and subsequently changes her mind

Question 8

Edgington v Fitzmaurice

Answer 8

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

Question 9

Keates v The Earl of Cadogan

Answer 9

Silence does not amount to misrepresentation

Question 10

With v O’Flanagan

Answer 10

Silence can constitute misrepresentation where there is a continuing representation

Question 11

Hood v West End Motor Car Parking

Answer 11

Duty to disclose that insured goods are carried on deck of ship instead of in the hold

Question 12

Commercial Banking v RH Brown

Answer 12

Statement must be addressed to claimant

Misrepresentation possible in case of third party who makes false statement to misrepresenter

Question 13

Pan Atlantic v Pine Top Insurance

Answer 13

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

Question 14

Smith v Chadwick

Answer 14

If statement is found to be material, inducement will generally be inferred as a matter of fact

Question 15

Museprime Properties v Adhill Properties

Answer 15

Subjective test

Open to C to prove he was induced
Or to D to prove C not induced

Question 16

Horsfall v Thomas

Answer 16

No inducement where the representee was unaware of representation

Question 17

Atwood v Small

Answer 17

No misrep where representee relies on his own investigation

Question 18

Redgrave v Hurd

Answer 18

Representee under no duty to check the veracity of statement

Question 19

Smith v Eric S Bush

Answer 19

More likely courts will find that it is reasonable for representee to check statement in context of commercial contracts

Question 20

Derek v Peek

Answer 20

Classic definition of fraudulent misrep

1. There must be proof of fraud
2. 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

Question 21

Misrepresentation Act 1967, s 2(1)

Answer 21

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

Question 22

Hedley Byrne v Heller

Answer 22

Negligent misstatement

Duty of care exists where there is ‘special relationship’ between parties

1. It must be reasonably foreseeable by representor that representee will rely on statement
2. There must be sufficient proximity between the parties
3. It must be just and reasonable for the law to impose a duty

Question 23

Car v Caldwall

Answer 23

Cald sells car to rogue, who then sold it to Car

Held: Caldwell owns car

Question 24

Leaf v International Gallery

Answer 24

Action for recission may fail for lapse of time

Question 25

Clarke v Dickenson

Answer 25

Recission impossible in respect of shares in partnership which was later converted into a limited liability company

Question 26

Smith New Court v Scrimgeour

Answer 26

Measure of damages
Fraudulent - all the losses flowing from the transaction as a whole
Negligent - only the losses flowing from that specific misrep

Mitigation

1. P must mitigate as soon as fraud is discovered
2. Any damages awarded to P will be reduced by the value of any benefit P has acquired as a result of the contract

Question 27

East v Maurer

Answer 27

Loss of profits can also be claimed where a business has sustained a loss as a result of a fraudulent misrepresentation

Question 28

Downs v Chappell

Answer 28

Loss of profits cannot be claimed where there is a profit, though not as large as expected

Question 29

Clef Aquitaine v Laporte

Answer 29

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

Question 30

Royscott v Rogerson

Answer 30

Assessment of damages should be based on more generous measure available under tort of deceit

Contrib should not apply to negligent misrep

Question 31

Gran Gelato v Richcliff

Answer 31

Contrib is available as defence to negligent misrep