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
