Economic Delicts Flashcards
What is fraud?
Making a statement on any subject to believe to be untrue, even if do not know it to become false, is dishonest.
Don’t need intention to defraud
Which case states that you can now be an accessory to fraud?
Frank Houlgate Investment v Biggart Baillie
H&JM Potatoes v SoS for Scotland
Potato merchants had contract with Moroccan state owned corp to sell potatoes. Contract said that they should be free of all diseases. Govt dept checked and presented certificate saying nothing wrong with them, rejected when got to morocco.
Fraudulent misrep. Even though no intention to deceive, there was n reasonable basis for the belief that the potatoes were free from cyst eelworm. Knew it was untrue to say they were free and this could be enough. No evidence that they were properly examined.
Barry v Sutherland
Purchasers of property sought damaged from seller for misrepresentation. Had told buyer that profits were £50k higher than reality. Pursuers would not have entered into contract had they known the true situation. All losses which flowed directly from his alteration of position under the inducement of fraudulent representation of the defendants, not just those which were reasonably foreseeable. (Stair)
Smith New Court Securities v Scrimgeour
Employee of 2nd defendant, acting as broker for 1st made representations that in buying shares in a large company, bidder was up against a lot of competition ie it was a worthy investment
Damages given in price per share actually paid and what it would have fetched on the open market
What is inducing break of contract?
Comes from Lumley v Gye. Intentionally induces someone to break a contract made by him with another.
Requirements for inducing breach (Global resources v Mackay
Must be actual breach Knowledge that actions --> breach Intention to breach Causal link ie he procured / persuaded No lawful justifications
Rossleigh v Leader cars
Commercial lease provided that tenants should occupy and trade for 2 years. Tenants were wholly owned subsidiary. Loose relationship with parent company. Subsidiary 1 transferred stock to subsidiary 2 who then traded from premises. Defenders took over business and then went into liquidation. No intention to harm business, no knowledge of lease
Global Resources Group v Mackay
A company providing engineering services and personal to the oil company sought damages from consultant for allegation that he had induced breach of contact with company they had contract with.
M was employer by pursuers then became sole shareholder in another company. Then acted on behalf of rival business, used confidential info to get each contract between A and rival company.
What is causing loss by unlawful means?
Wrongful interference with actions of a third party in which claimant had economic interest and intention thereby to cause loss to the claimant.
Function - to provide remedy where claimant has been harmed through the instrumentality of 3rd party
Differences between inducing breach and causing loss?
Inducing breach requires action by 2 parties.
Unlawful means requires act which is not unlawful in first place, whereas breach is not
Unlawful means also does not depend on existence of contact
Inducing breach requires only breach hi causing loss needs loss
OBG v Allan
Company in dire financial difficulties. Creditor appointed receivers who took control of the business and terminated their contracts. Claimants went into liquidation. Suffered loss due to cancelling of contracts
No causal link between conduct and loss suffered. Already in poor position and really didn’t make much of a difference as already insolvent
Douglas v Hello
Actors entered into exclusive right to take and publish photos of their wedding with OK! Magazine.
Photos can be confidential. Had knowledge that this agreement had been imposed for the benefit of the Douglases. H knew about this, otherwise would not have taken photos covertly. Clear intention to cause loss, but not unlawful means
Mainstream Properties v Young
Inducing breach. 2 directors of company sought to purchase land, in direct competition with their company. Y financed the operation after checking with them that there was no conflict of interest. He relied on their assurance.
Factually played a role but asked especially and genuinely believed assurance. No intention to breach contract.
McLeod v Rooney
Operations manager told manufacturer (S) that they were experiencing financial difficulties. S had suspended production of v’s products, making it impossible for V to continue trading. Induced them to breach. Had R’s use of unlawful means in relation to V affected V’s freedom to deal with M?
Requirements
Intention to cause economic harm
Defender acted unlawfully
Such unlawful action affected 3rd party freedom to deal with pursuer.
