Chapter 13 - Misrepresentation & Chapter 15 - Illegality

Question 1

What is the definition of Misrepresentation?

Answer 1

A misrepresentation is a false statement of fact made by one party to another party which induced the other party to enter into the contract.

Question 2

What are the 3 elements of Misrepresentiation?

Answer 2

1) Made a Statement of Fact
2) False Statement of Fact
3) Material inducement/ reliance

Question 3

What is a Statement of Fact?

Answer 3

1) A representation is when a statement of fact is made.
2) They can later be Terms of a contract
3) Previously discussed but not inside the written contract are representations.

Question 4

What is NOT a Statement of Fact? Hint: There are 5.

Answer 4

1) It is NOT a puff
2) It is NOT a statement of opinion
3) It is NOT a statement of intention
4) It is NOT a statement of law
5) It is NOT silence

Question 5

What is “puff”?

Answer 5

They are exaggerations. The more detailed/precise they are, they are more likely to be representations.

Question 6

What is an “opinion”?

Answer 6

1) If an opinion is wrong, there’s no legal liability
2) Me staying loyal to my opinion is a statement of fact. If I lie to you about my “LOYALTY” to my opinion(not the content of the opinion), it is Misrepresentation.

Question 7

What is “intention”?

Answer 7

1) Similar to opinion. Me staying loyal to my intention is a statement of fact. If I lie to you about my “LOYALTY” to my intention(not the content of the intention), it is Misrepresentation.
2) There is implied assertion that I have the capacity to do so.

Question 8

What is the difference between Represenations & Terms?

Answer 8

Represenations/ Statement of Facts: Seller is asserting the truth of the facts. E.g. This car is new.

Terms: The seller promises me that something is true. E.g. I will sell you this new car.

Question 9

How to plead misrepresentation for both Represenations & Terms?

Answer 9

1) Terms: Breach the contract becuase of performance, misinterpretation
2) Representations: The contract is voided because it did not take considerations.

Question 10

What is a “Statement of Law”?

Answer 10

A Statement of Law cannot be misrepresenation.

Question 11

What are the two types of Representation?

Answer 11

1) Express representations
2) Implied represenations
- Conduct
- Gestures

These are part of Offer & Acceptance

Question 12

Why is silence Misrepresentation?

Answer 12

1) They are half-truths, false statement of fact
2) Tacit confirmation. E.g. Chortle, giggle. It does not clarify nor confirm the false statement of fact.
3) Silence of the Change in state affairs: If something later on becomes false, the maker should update & clarify
4) Silence of Good faith: If they have a duty of good faith (lawyers, insurance agents) to tell you the risks but DON’T, it is false statement of fact.

Question 13

What is Implied Representation?

Answer 13

1) It is low risk, because it is implied based on the understanding between the representor and representee.

2) It can be applied through:
-conduct
-gestures

Question 14

What is a case of Misrepresentation by implied representation through conduct? Hint: OG Girl Group

Answer 14

Spice Girls. In the contract, it relied on all members being together. Becuase one left in silence, it is false statement of fact hence misrepresentation.

Question 15

What is “Silence” for Misrepresentation?

Answer 15

Silence is rarely sufficient to amount a representation.

Question 16

Why is “Ambiguity” a False Statement of Fact? Hint: 2 Requirements

Answer 16

It is false when:
1) When the representee proves he understood the false meaning of the statement
2) When the representor intended for the statement to be understood falsely
E.g I like Apple. The fruit? Or the brand?

Question 17

What is Inducement and Reliance?

Answer 17

Because of the Statement of Fact, I relied on it which induces me to enter the contract.

Question 18

What are 3 types of Non-Inducement?

Answer 18

1) When claimant was unaware of existence of the represenation. E.g. I was not induced if I have never heard of it before.

2) When claimant knew the representation was untrue. E.g. I knowthe Statement of Fact was false and I was not influenced by it. I still bought it.

3) When claimant does not allow a representation to affect his judgement. E.g. Even after consideration, I would still buy it.

Question 19

What is “Due Diligence”?

Answer 19

The person who made false representation cannot escape its consequences jsut because the innocent party has made his own inquiry/ due diligence. E.g. Even if I did not research enough, the person who lied still holds accountable/ liable.

Question 20

What are the 3 types of Misrepresentation?

Answer 20

1) Fraudulent
2) Negligent
3) Innocent

Question 21

What is “Recission”?

Answer 21

Misrepresentation renders the contract voidable.

Question 22

What are “Damages”?

Answer 22

1) Fraudulent Misrepresentation: Damages that are foreseable or not. E.g. Liable for both hospital bills & business deal of $1 million.
2) Negligent Misrepresentation: Damages that are foreseable. E.g. Liable for both hospital bills

Question 23

What is “Fraudulent Misrepresentation”?

Answer 23

It is hard to prove. There must be concrete proof. The proof has to be so strong that the motive of the guilty is irrelevant.

Question 24

What is “Negligent Misrepresentation”?

Answer 24

It is under common law. Under the Misrepresentation Act. The maker has no reasonable grounds to believe the statement.

Question 25

How is Misrepresentation considered negligent?

Answer 25

It is considered when the representor owed a duty of care to the representee. A special relationship must be known.

Question 26

What is Section 2(1) of the Misrepresentation Act?

Answer 26

A negligent misrepresentation (representor does not have reasonable grounds to believe that his statement is true) attracts the same liability as fraudulent misrepresentation.

Question 27

What is the difference between Misrepresentation and Mistake?

Answer 27

Misrepresentation: Evidence is a LIE. Inducement/ Reliance
Mistake: Evidence is WRONG. Knowledge, Sharp Practice.

Question 28

What is the difference between Fraudulence vs Negligence?

Answer 28

The end consequences are different.
Fraudulence: Voidable + damages (+++)
Negligence: Voidable + damages (+)

Question 29

What is the Exclusion Clause for Misrepresentation?

Answer 29

UCTA Section 11, Test of Reasonableness
If a contract contains a term which exclude or restrict:
1) Any liability that subjects to misrepresentation before the contract was made
2) Any remedy to the contract because of misrepresentation.

Question 30

What is Illegality?

Answer 30

Restraint of Trade

Question 31

What is Restraint of Trade?

Answer 31

A person cannot work at x type of industries for y number of years.

Only clause section voided, not the whole contract.

Question 32

What is “The Legal Test”

Answer 32

Is there legitimate proprietary interest to be protected by restricted covenant, over and above the mere protection of employee and employer? E.g Trade Secrets & Connections.

Question 33

What are the twin tests of reasonableness?

Answer 33

Restricted convenant reasonable in reference to the interest of parties. E.g. Employer + Employee

Restricted convenant reasonable in reference to the interest of the public. Fear competition of the market. Interest towards jobs.

Question 34

What are the 2 main situations of Illegality?

Answer 34

1) Sale of Business
2) Employment Contracts

Question 35

Sale of Business vs Employment Contracts

Answer 35

1) Without Restraint of Trade, the business you bought previously would be useless.

2) An employer would not be deprived of what he has paid for to the contract. (The employees’ services)

3) Sale of Business has more bargaining power than employment contract situation.

Question 36

For Employment Contracts, what are 2 main legitimate proprietory interests?

Answer 36

Condifentiality lasts forever,
Clause and Restraint of Time Clause has a time limilt.

1) Trade Secrets
2) Trade Communication

Skills are not propreitory assets

Question 37

What is the reasonableness test?

Answer 37

Longer, unreasonble.
Wider, unreasonble.
Two can complement each other
Pubic Interest

Question 38

What are factors to consider: Area and Dicussion?

Answer 38

1) Unlimeted duration
2) The exceed circumstances that were reasonably required
3) Protect Platiff’s interst, not against public interest.
4) Singapore is so small, longer time instead.

Question 39

What are factors to consider: Public Interest?

Answer 39

Need to give the platiffs a virtual monopoly of thr business. E.g The public wants the serice to extrerminate White Ants.

Question 40

What is the “Blue Pencil Test?

Answer 40

An act of sympathy in court. Strike off portions of the clause to make it workable by making restraint reasonable because it was too long and or too wide.