Contract 5 - Misrepresentation Flashcards

1
Q

What is the difference between a condition and a warranty?

A

Condition: important term going to root of the contract ⛓️
Warranty: less important term not going to root 👍

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2
Q

What’s the difference in remedy between a condition and a warranty?

A
  • Condition can result in terminating 💥
  • Both can result in damages 💵
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3
Q

What are the respective consequences for breach of condition or warranty?

A
  • Condition⛓️: right to repudiate 💥& damages 💵
  • Warranty👍: only damages 💵
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4
Q

What is the starting point for determining the classification of a term?

A
  • Has term been classified by
    (i) statue 🇬🇧
    (ii) the parties or 🥳
    (iii) previous judicial decision 🧑‍⚖️
  • does it go to root 🌳
  • If can’t determine, apply test for innonimate term ⚛️🐈
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5
Q

What is the test for an innominate term?

A

Does breach deprive the innocent party of substantially the whole benefit from the contract?

  • yes = condition ⛓️
  • no = warranty👍
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6
Q

What vitiating factors are there?

A
  • Mistake 😳
  • Misrepresentation🤥
  • Unfair Contract Terms 📝
  • Duress & Undue Influence 🔨😈
  • Illegality 👮
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7
Q

What are the requirements for an actionable misrepresentation?
🤥

A
  1. clear 🔍
  2. False 🤥
  3. Statement of fact 👇
  4. Addressed to Claimant 🫵
  5. Induces C to Enter into Contract 💝
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8
Q

What is a statement of fact NOT?
👇

A
  • Statement of opinion (unless unbalanced parties) 🤷
  • Statements of intention 🔮💡
  • Silence (unless previous statement becomes un true) 🤐
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9
Q

How does one determine if a misrepresentation ‘induced C to enter contract’?

A
  • objective: 🗣️ would’ve influenced 💝a reasonable person 🧑‍💼 then inducement inferred & burden shifts to 👉D to rebut
    OR
  • subjective: representee shows it was personally 😵‍💫 was induced 💝by statement 🗣️
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10
Q

When can a statement not be an inducement for misrepresentation?

A

Statement:
- not communicated to representee
🫢
- known to be untrue to representee
💩
- did not affect representee’s decision
🙉

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11
Q

What is the position on inducement where representee made their own investigations?

A

If they relied on their own investigations, not the misrepresentation, cannot bring a claim
🔍

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12
Q

Is there a duty to check a misrepresentor’s statement?

A

No

  • but if unreasonable, contributory negligence may be possible. 🤪
  • The more commercial 👨‍💼 they are, the likelier court will consider it reasonable
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13
Q

When may statements of opinion form a claim for misrepresentation?

A

If representor considered to have a greater knowledge than representee,
🤓

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14
Q

When can statements of future intention form a claim for misrepresentation?

A

misrepresented their existing intention 💡

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15
Q

When can silence form a claim for misrepresentation?

A
  1. Half-Truths: technically true statements but misleading 🤥
  2. Continuing Representations: at beginning of negotiations, statement is made but becomes false prior to entering the contract, representor must correct the representation ⏱️
  3. Contracts uberrimae Fidei: duty to disclose material facts in some contracts where one party is in a particularly strong position to know material facts 🏥🩻
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16
Q

What is the effect of misrepresentation on a contract?

A

Makes contract voidable - must take action to rescind

17
Q

What are the different behaviour categories of misrepresentation and their definitions?

A
  1. Fraudulent: made knowingly or w/o belief in truth, or recklessly (flagrant disregard for truth) - failure to disclose must be deliberate/dishonest
  2. Negligent: representor fails to show reasonable grounds to believe, or did believe up to time contract was made, that statement was true - an easier claim but treated liked fradulent
  3. Reasonable: Representor proves they had reasonable grounds to believe in truth and did so until time of contract
18
Q

What remedies are there for misrepresentation for fraud

A
  • Damages: greatest for fraudulent, but neg will often match;
  • can recover for all losses even if not foreseeable 👀
  • C must mitigate;
  • value of damages will be reduced by benefit received
  • contributory negligence not available for Fraud 🕳️🚶‍♂️
    OR
  • Rescission: put parties back in position before contract - only awarded where this is possible 🔁
19
Q

What remedies are there for misrepresentation for negligent

A
  • No right to damages but at Court’s discretion
  • Damages: greatest for fraudulent, but neg will often match;
  • can recover for all losses even if not foreseeable 👀
  • C must mitigate;
  • value of damages will be reduced by benefit received
  • contributory negligence is available for negligence 🕳️🚶‍♂️
    OR
  • Rescission: put parties back in position before contract - only awarded where this is possible 🔁
  • Indemnity: covers expenses for obligations assumed due to contract - not granted where damages given💰
20
Q

What remedies are there for misrepresentation for reasonable care

A
  • Rescission: put parties back in position before contract - only awarded where this is possible 🔁
  • Indemnity: covers expenses for obligations assumed due to contract - not granted where damages given💰
  • no right to damages but at Court’s discretion
21
Q

Are exemption clauses allowed for misrepresentation?

A

Only if it is reasonable
⚖️

22
Q

Can a misrepresentation be carried out by actions alone?

A

Yes, concealment of dry rot was found to be a misstatement.