Contract - False Preliminary Statement Flashcards
If the party making the statement has greater skill/ knowledge the statement is likely to be a term
Dick Bentley
If the statement is of vital importance to the contract and the recipient made this known the statement is likely to be a term
Bannerman v White
If the maker of a statement tells the recipient not to bother verifying it, the statement is likely to be a term
Schawel v Reade
Where a party makes a statement about something out of his control the statement is likely to be a term
Birch v Paramount Estates
If the recipient had greater skill/ knowledge the statement is likely to be a representation
Oscar Chess
If there was a long time lapse between the statement and the contract the statement is likely to be a representation
Routledge v McKay
If the maker of the statement asks the recipient to verify it the statement is likely to be a representation
Ecay v Godfrey
If the statement is oral and not repeated in the written contract it is likely to be a representation
Routledge v McKay
What is requirements did Hadley v Baxendale set out for remoteness of damages?
1- Natural; and
2- Contemplated
What is the definition of misrepresentation?
A false statement of fact
Made at the time of or before the contract (by one party to another)
To induce the other party to enter into the contract
The statement must be one of fact, not opinion
Bisset v Wilkinson
A misrepresentation can be made by conduct
Spice Girls v Aprila
General Rule: Silence does not constitute a misrepresentation
Hamilton
Failing to disclose a change of circumstances that renders a previously true statement false is misrepresentation (exception to silence rule)
With v O’Flanagan
Telling of a half-truth is misrepresentation
Curtis v Chemical Cleaning and Dyeing
There must be reliance on the statement for it to have induced a party to enter into a contract
Attwood v Small
A statement need not have been the only inducement to be a misrepresentation
Edgington v Fitzmaurice
Failure to verify the truth by a representee will not prevent a claim for misrepresentation
Redgrave v Hurd
What is the effect of misrep?
Makes the contract voidable. The innocent party can affirm or rescind
What is the effect of rescission?
1- Parties return money/ property to each other
2- Both parties are released from future obligations
What must be done to allow rescission?
The party wishing to rescinding must notify the other party of their intention to do so
What are the 4 bars to rescission?
1- Delay (from time misrep should have been discovered to rescission)
2- Affirmation (e.g. claimant paid whilst not under pressure)
3- Impossible to return property (Chrystal Palace v Iain Dowie)
4- Innocent third party acquires an interest in the property (e.g. by sale of goods)
What else may the innocent party claim on rescission?
1- An indemnity for expenses (but this is restricted to precise terms of the contract) (Whittington)
2- Damages
When will damages be awarded in lieu of rescission?
1- If the misrep was about a minor matter and it would be unjust to allow one of the parties to rescind
2- Will not be possible if rescission itself has been barred
If the misrepresentation was fraudulent, how would you claim for damages?
Sue in tort of deceit
Must show statement was made without belief in its truth/ recklessly (Derry v Peek)
Usual rules around remoteness do not apply for claims to damages following fraudulent misrepresentation
East v Maurer
If the misrepresentation was not fraudulent, how would you claim for damages?
Under s 2(1) Misrepresentation Act 1967:
C only needs to show that there was a misrepresentation and he suffered loss
(basically removes need to claim for fraudulent misrep)
Usual rules around remoteness do not apply for claims to damages following non-fraudulent misrepresentation
Royscot Trust v Rogerson
What defences are available to a defendant accused of misrepresentation?
ONLY for non-fraudulent misrep under s2(1) Misrepresentation Act 1967:
Reasonably and honestly believed facts were true
hard to prove (Howard Marine v Ogden)
