CONTRACT LAW L4 - Misrepresentation - STATEMENTS OF FACT Flashcards
What does statement of fact include and not include? (6)
They include statements of facts, some conduct and statements of law and does not include statements of opinions, statements of intention an silence.
What may happen if a representor is in a position of superior knowledge? (2)
A statement of opinion by them may be held to involve a statement of fact that there are reasonable grounds for their opinion and if there are no reasonable grounds for that opinion then a false statement has been made.
What is meant by statement of future intention? (1)
A representation is an assertion of the truth that a fact exists or did exist and therefore can have no reference to future events or promises.
Is it a misrepresentation if the representor makes a promise regarding a future intention? (2)
No but it is prevented from following that course of conduct or if circumstances alter so that they can change their mind about that intention.
What did Bowen LJ state? (1)
‘The state of a man’s mind is as such a fact a the state of his digestion.’
Will silence give rise to a misrepresentation? (2)
Not in most cases, the general rule is that there is no duty to disclose facts which, if known, might affect the other party’s decision to enter the contract.
What are the recognised exceptions to the Keate rule? (3)
Half-truths, continuing representations and contracts uberrimae fidei.
What is the rule in regard to half-truths? (1)
Silence does not amount to a misrepresentation occurs when there is a half-truth.
What is the exception to silence and the principle of continuing negotiations? (4)
If at the beginning of negotiations a statement is made which is true but prior to entering into contract becomes false then the representor is under an obligation to correct the representation. If they fail to do so and allow the other party to enter into the contract still believing the representation is true then they will be liable for misrepresentation - the principle of continuing representations.
What are contracts of uberrimae fidei? (1)
Contracts of utmost good faith.
What happens in terms of contract uberrimae and exception to silence? (1)
There is a duty to disclose material facts in some types of contract in which one party is in a particularly strong position to know the material facts which form the basis of the contract.
What would be an example of a contract uberrimae fidei and why? (2)
A contract of insurance where at common law disclosure of all material fact must be made to an insurer.
What are fiduciary relationships? (2)
A particularly close relationship characterized by trust and obligations of good faith e.g. between a company and its directors or between a trustee ad beneficiaries of a trust.
What obligation may there be between parties who are in a fiduciary relationship (1)
An obligation to disclose information.
