Contract Law Second Term - MISTAKE AND MISREPRESENTATION Flashcards
Pitt v Holt, per Lord Harman?
‘True requirement is for there to be a causative mistake of sufficient gravity’
When is the only time future intention is actionable as a statement of MR?
When the person know they have no intention/cannot do it; MR of existing intent
Hartog v Colin & Shields
Argentine hare skins
What was the type of mistake in McRae?
Deliberately induced mutual mistake without reasonable grounds
What are the three important points in Great Peace?
(1) Extremely narrow view of mistake, (2) emphasis placed upon construction of contract and (3) drew an analogy between cases of common M an cases of frustration
Hailbut, Symons & Co v Buckleton
Consider context of statements for MR
CoA denied appeal to HoL because insignificant damages, but noted both academic and judicial criticism of s.2(1) MRA
Forest International v Fosters Marketing
Who said it was ‘too soon’ to throw Solle and the case law it generated ‘into oblivion’?
McKendrick
What case showed that a claim for damages for NMS is vulnerable to rule on remoteness?
The Wagon Mound
What type of remedy is rescission and when is it used?
Equitable, and only when parties can be restored to their original positions
What case explains the workings of rescission for MR?
Car & Universal Finance Co v Caldwell
When is an opinion considered actionable as an MR statement?
When it is ‘by the one who knows best’ and implied he knows facts to justify it
Why was the description of land as ‘fertile and improvable’ in Dimmock v Hallett not seen as a statement of fact?’
‘Flourishing description’
What case gives the requirements for FMR?
Derry v Peek
How could the outcome have been different in Leaf v International Galleries?
If it had been FMR instead of IMR
Why would C use FMR over s.2(1)?
If C has been careless and wishes to avoid CN
What type of action is FMR?
Tortious, not contractual
What was the type of mistake in Cundy v Lindsay and effect on contract?
A thinks B is C so void
What was Nicholls’ view in Shogun Finance on the tension between face-to-face and written contract dealings?
Same principle should be applied ‘irrespective of the precise mode of communication’
Dimmock v Hallett
Fertile and improvable land
What case shows that A’s right to rescind is restricted if it would affect subsequently acquired rights by C, a bona fide purchaser?
Lewis v Averay
Example of res extincta?
Couturier v Haste; Scott v Coulson
How did MacMillan describe the case of Bell?
a ‘failed case of fraudulent misrepresentation’; ‘hard cases really do make bad law’
What are the two types of remedies for misrepresentation?
Damages (backward looking) and/or rescind the contract
Redgrave v Hurd
Solicitor’s firm - £300, but only £200
What was the ratio in Bell v Lever Bros (in regard to the mistake)
it doesn’t matter if B would have not entered the bargain had they known the true facts; he gets ‘exactly what he bargains for’ (Lord Atkin)
Lady Hood of Avalon v Mackinnon - test for mistake
Consider seriousness of the consequences of the gift
What type of mistake was in Griffith v Brymer?
Operative - purpose can’t be fulfilled; already decided
What are the two ways we could reform mistake?
Articles 4:102 - 105 of ‘Principles of European Contract law’ for greater flexibility OR H Beale’s alternative framework in “Mistake and Non-Disclosure of Facts”
What statement was seen as a statement of fact/half truth in Dimmock v Hallett and the contract was unwound on this ground?
That the area was fully let but one of the tenants had given notice
What did Denning say about Cundy in Solle?
Should have been a voidable contract
What case shows the ‘triumph of orthodoxy’ for mistake?
Great Peace Shipping Ltd v Tsavliris Salvage Ltd
How can one determine if a mere puff is actionable as a statement of MR?
Look to the specificity and concreteness of the statement
Who gave four ingredients for common mistake and in what case?
Lord Phillips in Great Peace
Actionable MR usually gives rise to two remedies; what are they?
Rescission and damages
What case shows the first challenge the the Orthodox position to mistake (Smith v Hughes)?
Shogun Finance Ltd v Hudson
what is the basic rule of mistake?
if B is not responsible for A’s mistake, even if B’s knew, it has no effect
In what case did the equitable doctrine of mistake appear?
Solle v Butcher
Chartbrook v Persimmon Homes
Rectification allowed if the terms do not reflect objective intention of both parties; the ‘prior consensus’
What major issue did the court in Great Peace have with Solle?
It overruled Bell v Lever Bros essentially
Joscelyne v Nissen
Father and daughter; ‘rent and outgoings’
Why was the statement in Smith v Land not considered mere puff?
It was dishonest and deliberately misleading of a very relevant point
In an MR question, where should you go before fraud due to advantages for the claimant?
S.2(1) MRA
What are the two difficulties with the mistake as to identity cases?
The difficult relationship between a written and an oral contract; difficult relationship between face-to-face dealings
Why should H Beale’s alternative framework NOT be used?
He himself states it would be ‘less certain than the current law’
Smith v Land and House Property Corporation
Opinion was a material fact because ‘by the one who knows the facts best’
Carlil
Smoke ball; promise was a term of the contract
What is the measure of damages for NMS the same as?
Tort of negligence
What did Lord Atkin say in Bell about the mistake?
He gets ‘exactly what he bargains for’
Bisset v Wilkinson
Sheep
How can s.3 MRA be overcome?
Satisfy reasonableness requirement in s.11 UCTA
When can a claimant not claim non est factum and according to what case?
When he has been carless/hasn’t read it by choice (United Dominions Trust Ltd v Western)
What fits under IMR now?
Statement that is neither fraudulent not negligent
What are the three exceptions to silence not giving actionable MR?
Half truths; continuing representations and contracts uberrimae fidei
With v O’Flanagan
income of medical practice but ill
Royscott Trust Ltd v Rogerson
Finance company; hire deposit lower than stated and customer defaulted
Why was the statement in Esso Petroleum considered MR?
Superior knowledge of the petrol company
What is Clarke v Dickinson an example of in the area of rescission?
Parties cannot be restored so bar to rescission
Why would C use NMS over s.2(1)?
No contractual relationship with D
What is the test for inducement in MR?
To affect a reasonable person
Why is the approval of McRae in Great Peace difficult?
Hard to reconcile with s.6 SoGA; why distinguish between goods that have perished and those that never existed?
What did Nicholls and Millett argue for in Shogun?
Overruling Cundy and preferring later decisions (i.e. Lewis v Avery)
What type of MR was there in Redgrave v Hurd?
Innocent MR
Bell v Lever Bros
Employees, breach
What are the two ways an MR can be made?
Directly or through a third party with the intention that it be passed on (Smith v Eric S Bush)
Museprime Properties Ltd v Adhill Properties Ltd
If statement wouldn’t have induced the reasonable person then the claimant must show it induced them
On whom does the burden fall for FMR and why?
Claimant, because taken seriously
Why is s.1(a) MRA attractive?
Rescission is far easier under MR than under BoC
Why was rescission rejected in UCB Corporate Services v Thomason & anor?
No loss to representee
What do damages do in MR?
Reflects profit that would have been made without MR; Forward-looking.
What are the two written contract mistake cases?
Cundy; King’s Norton Metal Co
When is it less likely a common mistake will be fundamental?
When it’s as to the quality of the goods (Bell v Lever Bros; Smith v Hughes; Leaf v International Galleries)
Ingram v Little
Two sisters; post office
Derry v Peek
Steam power
What did Moore-Bick J say in Peekay International Ltd v ANZ Banking Group Ltd?
No reason why parties should not be allowed to give up right to claim MR, regardless of inducement and materiality
Esso Petroleum Xo Ltd v Mardon
Thoroughfare
Why is s.3 MRA no longer as big of an issue as T&A thought it was?
Now dealt with by reasonableness test of s.11 UCTA
Raffles v Wichelhaus
Two Peerless sailings (D - Oct; C - Dec)
What was two examples of an MR of existing intent (one failed and one succeeded)?
Wales v Wadham; Edgington v Fitzmaurice
What is Long v Lloyd an example of?
C affirming the contract and being unable to rescind it consequently
What case is Magee very similar to?
Bell
What did Denning say in British Movietonesws v London and District Cinemas?
Courts can change a contract to make it ‘just and reasonable’ even if event occurred after contract and did not frustrate it
What two academics said that s.2(1) is to compensate victim of MR for loss flowing from it?
Treitel and Atiyah
Why was it decided the contract was void (had never existed) in Cundy?
Of C ‘they knew nothing, and of him they never thought’ (Lord Cairns)
What does unambiguous mean in the context of misrepresentation?
If it could be interpreted to be true then there is no MR
What did Phillips rely on to show that performance was not impossible in Great Peace?
The gap between CP realising how far away GP were and cancelling the contract
In regard to s.2(2) MRA, what case stated that you do need to still have a right to rescission at the date of the hearing?
Government of Zanzibar v British Aerospace (Lancaster House) Ltd
What did Lord Cranworth LC say in Couturier v Haste about the cotton?
‘No such thing existing’, it could not be sold or purchased so buyer could not sue seller for price
Associated Japanese Bank Ltd v Credit du Nord SA; what did Steyn say?
He said there are essentially three stages; (1) did the contract provide who bears the risk of the mistake? If no, (2) is the contract void at common law? If no, (3) is the plea in equity valid?
Cundy v Lindsay
Handkerchiefs
Under what section of MRA are damages awarded in lieu of rescission?
S.2(2)
Who said in Bell that the he gets ‘exactly what he bargains for’?
Lord Atkin
When is it more likely a common mistake will be fundamental?
When as to the existence of the subject matter (s.6 SoGA; McRae)
Why is rescission sometimes used even when the MR has become a term?
To get out of the contract without damages
IFE Fund SA v Goldman Sachs International ratio
If no actual knowledge that information is misleading, maybe no duty to disclose
Phillips v Brooks
Ring and cheque
In what case did the CoA deny appeal to HoL because insignificant damages, but noted both academic and judicial criticism of s.2(1) MRA?
Forest International Gaskets Ltd v Fosters Marketing Ltd
Why was the nemo dat exception of the minority in Shogun rejected?
SoGA had enshrined nemo dat so they cannot abrogate or modify the rule (see s.23 and 21)
Nicholls in Gran Gelato v Richcliff (Group) on s.2(1) MRA?
CN forms a part of the section
What was the MR by the solicitor in Redgrave v Hurd?
Stated that the firm brought in £300, but only £200
Redgrave v Hurd
Elderly solicitor
What case showed that a duty of care under NMS does not extend to a fall in the market price?
South Australia Asset Management Corporation v York Montague Ltd
What type of contract does a MR produce?
Voidable
What are the three ways mistake in equity differs from that in common law according to Solle?
Scope is wider, renders contract voidable and greater remedial flexibility (setting aside ‘on terms’)
What was the legal test set down by Lord Phillips in Great Peace?
Analogy with frustration; high legal test of impossibility and lack of provision in the contract
Clinicare Ltd v Orchard Homes & Developments Ltd
Investigate dry rot
What does s.2(3) MRA regulate?
Limits freedom to exclude liability for MR if it (1) excludes/restricts liability for MR made before C or (2) excludes/restricts any remedy available due to MR
What was the split in Shogun in terms of the judgement?
3:2
What remedies are available for IMR?
Only rescission; no damages
Why is the ‘fiction of fraud’ criticised?
‘Treats rogues as fools’
What section of MR does Creamdean v Nash outline?
S.3
What type of goods does s.6 SoGA cover?
Specific goods which have perished at the time of contract
When is misrepresentation actionable?
When (1) an unambiguous false statement of existing fact (or law), (2) is made to the claimant, (3) which induces him to enter the contract
Islington LBC v UCKAC
Voidable contract exists until ‘set aside by an order of rescission’
What other argument was followed in Shogun, and rejected?
Bailment of car to fraudster
Lady Hood of Avalon v Mackinnon
Large gift to elder daughter, forgetting earlier large gift upon marriage
Edgington v Fitzmaurice
Debts from shares; portfolio
What is the requirement for a gift/voluntary disposition to be set aside for mistake?
Causative mistake of sufficient gravity
What is non est factum?
Failure/inability to understand the nature of the document you have signed
What case shows how difficult it is for defendants to escape liability under s.2(1) MA?
Howard Marine v A Ogden & Sons
What three different categories of mistake did Lord Atkin give in Bell?
Identity, existence of subject matter and quality
Who said s.2(1) MRA ‘treats fools as rogues’?
R Hooley
Why was Gordon v Selico slightly difficult for MR?
Whether it was non-disclosure (non-actionable) or actionable, active conduct to conceal the rot
Why might C not use s.2(1) MRA in general?
Court may enforce Draconian consequences or MR made after contract
Smith v Eric S Bush
surveyor reports to bank knowing it will be passed to purchaser
What two cases show the courts refusing rescission due to harshness on representor?
UCB Corporate Services v Thomas & anor; William Sindall plc v Cambridgeshire CC
Name at least three policies underpinning mistake, according to McKendrick
Promoting commercial certainty, ‘fairness’ or upholding integrity of agreement (hampered by Smith: objective test)
What type of MR was there in Caldwell?
FMR
What four things did Lord Phillips suggest need be present for common mistake to void a contract in Great Peace?
(1) Common assumption as to existence of affairs, (2) no warranty by either side, (3) non-existence not attributable to fault and (4) renders performance impossible
Name five types of mistake (one is a defence)
Unilateral, common, mutual, misrepresentation and non est factum
Smith v Hughes test for mistake
Objective test, regardless of knowledge
What concept did the case of Cundy v Lindsay introduce?
That contracts could be void automatically for mistake of identity if it is of crucial importance
what did T&A say about s.3 MRA?
Enormous width
Solle v Butcher
Rent restriction acts
What case followed Solle?
Magee v Pennine Insurance
When is the effect of a mistake to mean the contract is void?
No agreement
What are the three causes of common mistake?
Res sua, res extincta and mistake as to quality
What remedy of MR is a right?
Damages
When is rectification of a mistake possible?
If B knew or B suspects A has made a mistake and B caused it
What is the main requirement for common mistake?
It must be fundamental
What case shows that if A’s mistake caused by B’s MR leads to a void contract, A may be protected against C?
Cundy v Lindsay
What is the difference between common and mutual mistake?
Common is they make the same mistake; mutual is they are at cross-purposes
Smith v Chadwick, per Lord Blackburn on inducement
Only need to show it was ‘likely to induce a person to enter into a contract’; no need to call claimants as witness
What was the common fundamental mistake in Magee?
That Magee had a valid claim
Fitzroy Robinson v Mentmore Towers Ltd
Lead architect
William Sandall plc v Cambridgeshire CC
Private foul sewer
Why does FMR produce the greatest damages?
No remoteness limit and no reduction for CN
What happens if B is responsible for A’s mistake by make a misrepresentation?
A can avoid any contract entered into on reliance of the MR
What are the two elements of non est factum?
Permanently/temporarily unable to understand document, but no fault and (2) real/substantial difference between what he thought it was and what it was
What case shows the orthodox position to mistake?
Smith v Hughes majority position
What are the two coronation cases?
Griffith v Brymer (mistake) and Krell v Henry (frustration)
When is the effect of a mistake to mean the contract is voidable?
Agreement but limited and assumptions falsified so consent is nullified
Why did the mistake claim in Smith v Hughes fail?
Mistake not to a fundamental term but to quality
Creamdean v Nash
Resulted that from the clause, no representations had been made at all so not reasonable
What happens if A’s mistake caused by B’s MR gives no contract with B?
A may even be protected against C (Cundy v Lindsay)
In Associated Japanese Bank v Credit du Nord SA, what did Steyn suggest about the application of mistake in equity?
Supplementary to common law
In what case did the Court expand heads of damages for FMR to ‘loss of chance’?
4 Eng Ltd v Harper
Name at least four cases of mistake as to identity
Shogun Finance; Cundy; King’s Norton Metal Co; Phillips v Brooks; Ingram v Little; Lewis v Avery
Couturier v Haste
Selling corn already sold
Clarke v Dickinson
Shares in partnership, converted to limited liability company
Why was there no mistake in Leaf v International Galleries?
He believed he was buying a painting and he got a painting
How does s.2(2) tie up with s.1(a) MRA?
S.1(a) allows rescission even if a term, but s.2(2) controls this by meaning the court can give damages instead; balancing the two
What were the two grounds of explanation in Shogun among the majority?
(1) There is a distinction between written contracts and non-written contracts, and (2) return to application of general objective test of contract formation and avoid distinctions
What are two examples of third party rights accruing such that it is a bar to rescission?
Phillips v Brooks –> Ring; s.23 SoGA
McRae v Commonwealth Disposals Commission
Oil tanker
What does the case of McInterny v Lloyd’s Bank Ltd show about the requirement for a statement to be unambiguous?
No unreasonable construction of the statement can be placed on it by the other party
What is the general rule for unascertained goods?
Blackburn Bobbin Co Ltd v TW Allen & Sons Ltd: lack of availability is no excuse for seller
What did the judges suggest in GP in terms of remedial flexibility?
They suggested ‘scope for legislation to give greater flexibility to our law of mistake than common law allows’
What case gives the requirements for negligent misstatement?
Hedley Byrne v Heller & Partners
What is the effect of a mistake?
To negative or nullify consent
Smith v Land and House Property Corp
‘Desirable tenant’
How are damages for NMS assessed?
All losses reasonably foreseeable and not too remote; also vulnerable to CN
Why was there no mistake in King’s Norton Metal Co v Edridge Marrett & Co Ltd?
No separate entity between B and C, so not a valid claim for mistake
Spice Girls v Aprilia World Service BV
One member leaving
Why is there a difficult relationship between face-to-face dealings in cases of mistake as to identity?
How to distinguish Ingram (sisters) and Lewis (Pinewood)
What was the test set down for NMS in Hedley Byrne?
(1) Special relationship, causing a duty of care; (2) burden of proof on represent to prove (1); (3) measure of damages vulnerable to remoteness and contributory negligence
What case made it clear a unilateral mistake is not sufficient for rectification?
Riverlate Properties Ltd v Paul
Doyle v Olby (Ironmongers)
“The defendant is bound to make reparation for all the actual damages directly flowing from the fraudulent inducement”, Denning
‘Fiction of fraud’
Royscott Trust v Rogerson
Why can’t we be sure the judges decided on a lack of consensus ad idem voiding the contract, according to AWB Simpson?
No reasons given
What are the four face-to-face dealing mistake cases?
Shogun; Ingram v Little; Phillips v Brooks; Lewis v Avery
What is the remedy for breach of contract?
Damages (forward looking)
Why was there an action for MR in Clinicare Ltd v Orchard Homes & Developments Ltd?
Implying they had carried out further investigation into dry rot when they hadn’t
Before 1967, what were the two categories of MR?
Innocent and FMR
Magee v Pennine Insurance
Insurance proposal incorrect, compensation
What was the ratio in Dimmock v Hallett?
The more specific and concrete the statement, the more likely it will be considered a statement of fact
What happens when there has been a material non-disclosure in contracts of insurance?
Insurer can avoid the contract
What test did Raifeissen Zentralbank Osterreich AG v Bank of Scotland give for inducement of a statement of MR?
Must have been a real and substantial part of inducement, but need not have been the sole inducement (but for causation)
What does s.1(a) MRA allow?
Terms of contract can be rescinded when party has been misled by IMR; prior to this, only allowed remedies through BoC
What case shows the importance of construction of contract in mistake, highlighted by the judges in Great Peace?
Couturier v Haste; you can contract out of s.6 so see if promise has been made as to existence, but no, so the contract is void
What form did the challenge to the Orthodox position come in?
Equitable doctrine of mistake
What was the inference of law in Redgrave v Hurd?
If statement was material and intended to induce, it is seen as inducing and there is no duty to inspect the papers
Long v Lloyd
D repairs lorry, keeps using it, so can’t claim against MS statements causing them to buy the lorry
What is Leaf v International Galleries an example of in the area of rescission for MR?
Lapse of time; five years later
What additional exception to what doctrine did the minority in Shogun attempt to establish?
Nemo dat through ‘possession vaut titre’ (assumption to protect 3rd party)
Who said, for mistake to set aside a gift, that there needs to be a ‘causative mistake of sufficient gravity’?
Lord Harman in Pitt v Holt
What two causes seem to show that a unilateral spontaneous mistake by A may suffice to set aside a gift?
Pitt v Holt; Lady Hood of Avalon v Mackinnon
McInerny v Lloyd’s Bank Ltd
Loan was stated as being ‘suitable for purposes’; not intended as a guarantee
What did the buyer in Redgrave v Hurd not do?
Check the accounts for the extra £100 missing
Now, what two events in particular have reduced IMR?
Hedley Byrne and MA
Peekay International Ltd v ANZ Banking Group Ltd
‘Non-reliance’ clause
What did Solle v Butcher say was the effect of mistake on the contract?
Voidable in equity
Why is NMS less favourable than FMR?
Damages limited by remoteness and CN, unlike in tort of deceit - requires foreseeability
When will s.2(2) be used?
OTHER THAN WHEN THE MR IS FRAUDULENT
What happened on appeal in British Movietonesws v London and District Cinemas?
Denning’s argument per rectification was rejected
Great Peace Shipping Ltd v Tsavliris Salvage Ltd
Cape Providence; 35 or 410?
When are courts unlikely to uphold rescission, and perhaps give damages under s.2(2) instead?
When the MR is trivial or will have a huge impact on defendant
Hedley Byrne v Heller & Partners
Financial information from bank of third party; considerable loss
Why is Great Peace problematic in particular (2)?
CoA overturned their own decision and judicially removed remedial flexibility
Griffith v Brymer
Coronation room (operative mistake)
Why was Caldwell held to still own the car?
Reasonable steps to express desire for rescission by contacting police PRIOR to car being sold
What did Jessel MR say in Redgrave v Hurd?
No ‘benefit from a statement which he now admits to be false’
Why does Hooley suggest the reference to FMR in s.2(1) should be removed?
FMR is an intentional tort
S.6 SoGA?
Contract for sale of specific goods which have perished at time of contract, unknown to the seller, voids the contract
What are the four types of MR?
Fraudulent, negligence misstatement at common law, statutory claim under s.2(1) MRA 1967 and innocent MR
What was the alternative framework suggested by H Beale in “Mistake and Non-Disclosure of Facts”?
M can be used if (a) A, but for the mistake, would have used different terms or no contract at all, and (b) B knew of the mistake and its importance unless (i) mistake was as to value of performance or (ii) the risk of the mistake was assumed
According to Peter Gibson LJ in Swainland Brothers Ltd v Freehold Properties Ltd, what elements need to be proved for rectification?
(1) Common intention over a particular matter, (2) outward expression of accord, (3) intention continued at the time of execution of instrument and (4) instrument did not reflect common intention by mistake
What type of claim is rectification?
Equitable, discretionary remedy
Resulted that from the clause, no representations had been made at all - caught under s.3 MRA?
Creamdean v Nash
Wales v Wadham
Remarry
What did the CoA do in Hedley Byrne v Heller & Partners?
Extended CL tort of negligence to negligent misstatements causing loss
What did Chitty say about Raffles?
Unlikely we would not be able to adopt one interpretation over another so rarely followed
In regard to intention continuing at the time of execution of an instrument for rectification, is this an objective or subjective test and according to what case?
Objective; Chartbrook Ltd v Persimmon Homes Ltd
What type of damages is under s.2(1) MRA?
Reliance measure; not contractual
When does Derry v Peek say fraud has been proved?
When the statement has been made (1) knowingly, (2) without belief in its truth or (3) recklessly
Who said contributory negligence forms a part of s.2(1) MRA?
Nicholls in Gran Gelato v Richcliff (Group)
What was the type of mistake in Hartog v Colin & Shields and effect on contract?
If B knows A is mistaken as to terms, A’s consent is nullified
What does Spice Girls v Aprilia World Service BV show in particular about a statement caused by words/conduct?
There is a thin line between actionable conduct and non-disclosure
What is the main difficulty in NMS?
Difficult to prove misstatement
What does Jocelyn v Nissen say about rectification and prior consensus?
It need only have been continuing and present when the written document was signed; does not need to have amounted to a concluded contract
Name the five bars to equitable, discretionary remedy of rescission
C affirms the contract as voidable so can’t rescind; lapse of time; can’t restore the parties; third party rights accrue; or damages in lieu of rescission
What three cases did the minority in Shogun find to be irreconcilable?
Cundy with Phillips and Lewis
What type of MR is Fitzroy Robinson v Mentmore Towers?
Fraudulent MR
Walters v Morgan
‘nod or a wink’
What was rescission rejected in William Sandall plc v Cambridgeshire CC?
Bad bargain; using s.2(2) when C is trying to get out of a bad bargain; flexibility
Gordon v Selico
Conceal dry rot
Shogun Finance Ltd v Hudson
Hire-purchase; Patel; driving licence
What is an example of a contract uberimmae fidei?
Contract of insurance
In what case was the statement for MR extended from existing fact to law?
Pankhania v Hackney LBC
What case gives the basic rule for silence and actionable MR statements?
Keates v The Earl of Cadogan
If an inducement is shown to have affected the reasonable person what can the defendant do?
Prove lack of reliance on it
What three cases show MR statement by words/conduct?
Walters v Morgan; Gordon v Selico; Spice Girls v Aprilia World Services BV
What did Lord Atkin say in Bell about the effect of the assumption a contract being destroyed?
Consent is then nullified
King’s Norton Metal Co v Edridge Marrett & Co Ltd
Company name
Why was the opinion in Bisset v Wilkinson not considered actionable as MR?
Lack of expertise limited it to being an opinion, not a statement of material fact
Scott v Coulson
Res extincta - dead
What type of mistake was there in Raffles v Wichelhaus?
Latent ambiguity; there was no agreement reached
Keates v The Earl of Cadogan
Silence does not give an actionable MR
Howard Marine v A Ogden & Sons
Capacity of barges; 1600, but only 1000; Lloyd’s
Why was the managed in Howard Marine still liable under s.2(1) despite honestly making the statements?
No reasonable grounds for believing truth, even after checking Lloyd’s
Lewis Averay
Pinewood studios; Richard Greene; criticism of Ingram v Little; presumption of intention to deal with person in front of them not displaced
What are three advantages of s.2(1) Misrepresentation Act 1967?
No special relationship needed, burden of proof falls on defendant to prove honest and reasonable belief in truth of statement AND ‘fiction of fraud
What three cases show situations where B knew A had made a mistake as to a term of the contract?
Smith v Hughes; Hartog v Colin & Shields; Scriven Brothers & Co v King & Co
Leaf v International Galleries
Constable
Why is there a difficult relationship between written and oral contracts in cases of mistake as to identity?
Contract was void in Cundy (handkerchiefs) but not in Lewis (Pinewood)
What is the ‘fiction of fraud’?
Liable as if FMR, without proving fraud
Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd
How important is the statement? Professional so statement are terms
Why are the damages for FMR favourable?
Don’t need to show loss was foreseeable and it is usually higher than other damages
Who formed the minority position in Shogun?
Nicholls and Millett
Why was the contract void in Raffles?
No consensus ad idem - even an objective test of the reasonable person would not allow them to state with certainty which sailing had been agreed
What is strongly inferable from the materiality of a statement?
Inducement
What is the effect of s.6 SoGA?
Voids the contract
Name at least three factors to which the courts have regard in mistake (consider Lady Hood; Great Peace; Hartog)
Seriousness of mistake, blameworthiness, knowledge etc
