Chapter 4 PT 2 Flashcards
The following will not amount to misrepresentation if they prove to be unfulfilled or noncorrect?
1) Expressions of opinion
2) Forecasts
3) Statements of intention
The following will not amount to misrepresentation if they prove to be unfulfilled or noncorrect
1) Expressions of opinion
2) Forecasts
3) Statements of intention
What does it mean when it’s said that the state of a person’s mind is considered a fact and how can they be held liable?
1) If a person expresses a belief or
opinion that they do not actually hold or lacks the will to act on a stated intention, they are misrepresenting their state of mind and can be held liable.
Can a person misrepresent their state of mind in a non-fraudulent way? If so,
how?
1) It’s hard to imagine a person misrepresenting their state of mind in a nonfraudulent way.
2) However, in England, the Court of Appeal has ruled that under exceptional circumstances, a sincere expression of opinion may imply a representation that the speaker has reasonable grounds for holding that opinion
What happens if a party induces another to enter into a contract by representing that they interpret a clause in the document in a certain way, even if it is not legally correct?
If a party induces another to enter into a contract by representing that they interpret a clause in the document in a certain way, they will be bound by that interpretation,
even if it is not legally correct
Does puffery amounts to misrepresentation?
1) Puffery does not amount to
misrepresentation.
What is the expectation of the other party when one party is praising their goods or services?
1) The party is merely praising their goods or services, a common practice in
sales, and the other party is generally expected to be aware of this
In the cases where a statement goes beyond general praise and specific
details it may then entail liability, what must be considered to determine whether it constitutes a misrepresentation or puffery?
1) If a statement goes beyond general praise and includes specific details, it
may entail liability.
2) In such cases, the entire statement must be considered to determine whether it constitutes misrepresentation or puffery
simplex commendatio non obligat’ is puffery
In particular puffery by a contracting party does not amount to misrepresentation if it is nonspecific and does not condescend to particulars.
Distict and define puffery
1) It can be difficult to distinguish between misrepresentation and puffery, and
this is a factual question to be determined objectively by the court based on
the specifics of each case.
2) Puffs are a type of opinion, and it has been suggested that the reason there is no liability for puffs, opinions, and statements of intention is that reliance
on such statements is not considered reasonable
What is the definition of dictum et promissum in the context of Roman and
Roman-Dutch law?
It’s defined as a material statement made by the seller to the buyer during negotiations, which goes beyond mere praise and comments on the quality of the item for sale (res vendita)
What are the aedilitian remedies available to a buyer if a dictum et promissum
turns out to be unfounded?
1) Cancel contract (action redhibitoria)
2) Sue for reduction of purchase price (action quanti minoris)
What is the difference between actio redhibitoria and actio quanti minoris?
1) The concept of a dictum et promissum is not confined to any specific categories and clearly excludes puffing.
2) It’s limited to the contract of sale
and within this context, it’s a form of representation
In what circumstances does a dictum et promissum become a warranty?
1) If the representation is guaranteed, it becomes a warranty
What are the usual remedies for breach of contract in the context of a dictum et
promissum?
1) Breach of this warranty will give rise to the usual remedies for breach of contract
Can a buyer still claim aedilitian relief if a dictum et promissum is guaranteed and becomes a warranty? Why or why not?
1) The buyer retains the right to claim aedilitian relief instead if they prefer
Misrepresentation contains the following:
1) Material
2) Other party and 3rd party.
3) Intention to induce a contract.
4) Induced contract
Non - Disclosure is subject to several exceptions.
By proving the following then omission is then actionable:
1) If the parties conduct is wholly or partly responsible for another’s ignorance.
2) If the contract requires parties to work together in a relationship of trust and confidence
3) If the party is involuntarily dependent on him for frank disclosure due to his particular knowledge
Describe the definition of Fair dealing and list the case in which the meaning was concretized.
1) Party is involuntarily dependent on him for frank disclosure due to his particular knowledge
2) Fair dealing → the right to have such info communicated to him would be naturally
recognized by ‘honest man in the circumstances.
3) Pretotius v Nata South Sea
Investment Trust Ltd
Material misrepresentation.
Test
1) Would the statement made have induced a reasonable person to enter into the contract?
Test in the case of a nondisclosure
1) Would a reasonable person have been persuaded against entering into a contract if the disclosure had
been made?
Misrepresentation by a party to the contract.
Miss representation must be made by a party to the contract or a an agent
An agent
1) requires relevant authority to conclude a contract and must have made the misrepresentation while contracting.
2) Misrepresentation by an independent third party, the only action is against the third party, and it’s based
on delict.
Intention to induce the contract
1) The misrepresentation must be made with an intention of inducing the contract.
2) The possibility that the party would believe and act on misrepresentation must be foreseen.
3) Misrepresentation must be made with the intention of inducing the other body to contract and must have resulted in him doing so
Induced contract
If party would have contracted irrespective of the existence of misrepresentation, then, NO Recission
2) The misrepresentation itself must have persuaded the party to enter into the contract.
2.2) See Bird v Murphy
3) Party may obtain rescission and restitution for a causal misrepresentation but NOT for an incidental one.
4)Causal misrepresentation —misrepresentation which results in a contract being formed.
5) Incidental misrepresentation —misrepresentation which does not induce the contract but results in less advantageous terms for a party
List the 3 types of misrepresentation
- Intentional fraudulent misrepresentation
- Negligent misrepresentation
- Innocent misrepresentation
Fraudulent misrepresentation is made intentionally and caused the representee to enter into the contract, it has a purpose to persuade the other party to
conclude the contract, how is this done. List 3
1) Knowingly or
2) Without honest belief in its truth
3) Recklessly, carelessly whether it should be true of false
Intentional fraudulent misrepresentation.
1) Representation of a false fact made fraudulently, which was believed by the representee and was one of the factors inducing him/her to contract.
2) Misrepresentation made with the intention of persuading the other party to conclude the contract
Fraudulent misrepresentation renders the contract valid
1) Renders the contract void
