Actionable Misrepresentation - Elements

Question 1

What does representation mean?

Answer 1

A representation is a statement asserting the truth of a given state of facts

Question 2

the party who allegedly made the representation is the….

Answer 2

Representor

Question 3

The Representee is…

Answer 3

the party who allegedly received the representation

Question 4

What is An actionable misrepresentation?

Answer 4

“An unambiguous false statement of fact made to the claimant and which induces the claimant to enter into the contract with the statement maker”

Question 5

What is the effect of a misrep?

Answer 5

make the contract voidable but not void.

In order to avoid the contract, the wronged party must take action to rescind the contract.

Question 6

What does the word unambiguous mean in misrep?

Answer 6

representation must be clear + will only form the basis of a claim in misrepresentation if it unambiguously has the meaning put forward by the representee.

The representor will not be liable if the representee has placed its own unreasonable construction on the representation

Question 7

When is a statement NOT false?

Answer 7

if it is substantially correct.

representation may be true without being entirely correct, provided it is substantially correct + the difference between what is represented and what is actually correct would not have been likely to induce a reasonable person in the position of the claimants to enter into the contracts”

Question 8

What is a statement of fact?

Answer 8

a statement asserting a given state of affairs.

=NOT an undertaking to do, or not to do something.

Question 9

Does Mere advertising ‘puff’ qualify as a representation?

Answer 9

No -

Question 10

Can statements be made other than words?

Answer 10

Yes - statements can also be made by conduct ie conduct may be treated as a statement of fact.

Gordon v Selico: the intentional concealment of dry rot was deemed to be a misrepresentation.

Question 11

Can a statement of law give rise to an actionable misrep?

Answer 11

Yes

Question 12

What statements don’t amount to statements of fact?

Answer 12

• statements of opinion
• statements of future intention
• instances of silence

Question 13

To whom must the misrepresentation be addressed to?

Answer 13

by the representor to the claimant.

Question 14

What role must the statement make in C entering a contract w the statement maker?

Answer 14

must play a ‘real and substantial’ part in inducing the claimants to act.

Question 15

What is the first Q court considers on the issue of inducement?

Answer 15

whether the representation was material.

Question 16

What is the test for materiality?

Answer 16

obj - did the statement relate to an issue that would have influenced a reasonable person?

Question 17

What are the two possible outcomes to the objective test on materiality?

Answer 17

(a) If statement found material = inducement will generally be inferred as a matter of fact. ‘burden’ shifts to D to rebut inference. D does this by proving that C was not subjectively induced.

(b) If statement not found to be material = inducement cannot be inferred as a matter of fact.
C must prove they were subjectively induced. If proved - held to have been induced by the misrepresentation

Question 18

Thus, inducement is established if….

Answer 18

Representee shows that the statement would’ve influenced a reasonable person + Representor cannot show that statement didn’t influence

OR

Representee shows that it personally was induced by the statement (subj test).

Question 19

There is no actionable misrepresentation where: (3 things)

Answer 19

(a) statement not actually communicated to representee; or

(b) statement didn’t affect representee’s decision to enter contract; or

(c) statement was known to be untrue by representee.

Question 20

Does the misrepresentation need to be the only reason the claimant entered the contract?

Answer 20

No

Question 21

What happens if a party DIDN’T rely on the misrepresentation, but on its own investigations?

Answer 21

Cannot bring a claim in misrep

Question 22

What if a representee does not check, where the court considers it reasonable for them to have done so, or carries out a negligent investigation?

Answer 22

= May open possibility for defence of contributory negligence (although cannot be used if misrep was fraudulent)

also the more commercial the representee is, the more likely the court will consider it reasonable for representee to have it investigated.