4.1: Misrepresentation

Question 1

What is misrepresentation?

Answer 1

-An untrue statement of material fact made from one party to the contract to the other before or at the time of entering the contract which induces a party to enter the contract

Question 2

What is meant by an untrue statement?

Answer 2

• Statement must be false

- Silence is not enough, Fletcher v Krell

Question 3

What are the exceptions to the rule on silence not being enough?

Answer 3

• If there are changed facts this must be made clear, With v O’Flanagan
• Where a contract requires uberrima fides, facts must be disclosed whether asked or not
• Duty to make aware in a relationship of trust
• When a half true statement is given

Question 4

In what forms can the statement be given and what case shows this?

Answer 4

• Does not have to be written or verbal
• Can be anything that would influence the others decision, including conduct
• Spice Girls Ltd. v Aprilia

Question 5

What is meant by material and what are the exceptions to this rule?

Answer 5

• Must be a statement of fact, not opinion or future intention, Bisset v Wilkinson
• If one party has specialist knowledge that the other party doesn’t, this can be regarded as a statement of fact, Smith v Land & House Property Co
• If it can be shown that the opinion or future intention was never truly held, Edgington v Fitzmaurice

Question 6

Who must the misrepresentation be made by and when must the statement be made?

Answer 6

• Must be made by a party of the contract, including anyone acting as an agent for the parties
• Must have been made before or at the time of entering the contract, not misrepresentation if told once the contract is formed

Question 7

What must the statement have made the other party do in regards to the contract?

Answer 7

• Must have induced them into the contract, meaning they must have relied on the statement and be a central part of their decision to enter it
• Attwood v Small

Question 8

True or false, it does not matter if a reasonable person would have relied upon the statement or not

Answer 8

• True

- Museprime Properties v Adhill

Question 9

What is innocent misrepresentation and what are the remedies for this?

Answer 9

• Statement is made in the honest belief that it was true, genuinely held on reasonable grounds
• Either rescission to return the parties to their original position or damages, but not both

Question 10

What is negligent misrepresentation and what are the remedies for this?

Answer 10

• The party has no grounds for believing the statement to be true, not a deliberate lie but nothing to suggest that they tried to find out it was true
• Can be done under the common law tort or the misrepresentation act 1967
• Remedies of recession or damages

Question 11

What is fraudulent misrepresentation and what are the remedies for this?

Answer 11

• One party makes a statement and knows it is untrue or is reckless as to whether its untrue, Derry v Peak
• Remedies of recissions or damages