False Peliminary Statement Flashcards
What are the classification of statements you need to assess in a question?
Puff -
Representation
Term
If there is not a valid contract, or you are not sure there is a valid contract, what do you need to consider?
A claim for negligent misstatement. Hedley Byrne principle of a special relationship.
Camparo tests
Pure economic loss is claimable
What factors need addressing before addressing whether the statement is a term or representation?
You can bring a claim for breach or misrepresentation or both.
No double recovery.
Any exclusion clause for misrepresentation only valid if it satisfies the reasonableness test set out in section 11 UCTA
What is the primary test for whether a statement is a representation or a term?
Primary test - what was the common intention of both parties?
Objective test - what conclusion a reasonable person would draw from the statement? Oscar Chess v Williams
What are the key guidelines for whether a statement is a term or a representation?
Does one party have greater skill or knowledge?
If the maker of the statement has greater skill, then more likely to be a term (Dick Bentley v Smith)
If recipient -then more likely to be a representation (Oscar chess v Williams)
Is the oral statement repeated in the written contract? If so - usually a term. If not - usually a representation (routledge v mckay).
But the court can decide it to be a term. And the contract is partly oral and partly written. (Birch v paramount estates)
Did the recipient make it clear that statement was of vital importance?
If so - more likely to be a term (bannerman v white)
Did the maker of the statement ask the other to verify it? If so, more likely to be representation (Ecay v Godfrey)
If they say ‘oh don’t bother’ - then more likely to be a term (shawel v reade)
If there is a lapse of time - then representation (routledge v McKay).
If the maker of a statement has greater skill and knowledge?
More likely to be a term
Dick Bentley v Harold Smith
If the recipient has greater skill and knowledge?
More likely to be a representation
Oscar chess v Williams
Is the oral statement is repeated in contract?
If so - more likely to be a term
If not - then likely to be representation
Routledge v McKay
But contracts can be partly oral and written so can still be term
Birth v Paramount Estates
If there has been a delay between making the statement and contract?
More likely to be representation?
Routledge v Mckay
Did the recipient of the statement make it clear it was of vital importance?
If so - more likely to be a term
Bannerman v White
Did the maker ask the recipient to verify the statement?
If so, more likely to be representation
Ecay v Godfrey
If they say, don’t bother to check that out, more likely to be a term.
Shawel v Reade
If the statement is deemed a term what do you do?
Always suggest that it could be deemed a term.
Breach of contract - Robinson v Harman
Hadley v Baxendale
If its a mis description of goods, consider breach of s13 SGA and a 3 of SGSA
Additional remedies for consumers.
What is the definition of a misrepresentation?
A false statement of fact made by one party of a contract to another, before the contract was agreed, which was one of the factors to induce that party to enter into the contract.
Is silence normally a statement that could be misrepresentation?
No.
Hamilton v Allied Domecq
Apart from fiduciary duties. Or contracts of the utmost good faith
What about when a fact is true but then there is a change in circumstances before the contract is finalised which makes the statement untrue.
Failure to disclose the change in circumstances may amount to misrepresentation
With v O’Flanagan
The statement must be a fact. But can an opinion still be misrep?
Yes. If the opinion is not genuine, then it’s misrep.
Smith v Land and House
But opinion in ignorance as in Bisset v Wilkinson is not misrepresentation (guessed how many sheep there are).
Conduct can amount to misrepresentation.
Spice girls v Aprilla
Half truths can be misrepresentations?
Yes - Curtis v cleaning
So for e.g. If its true at the moment but you know it won’t be true in foreseeable future
What if you act on external advice? Ie go and ask a professional surveyor after your mate says a house is fine.
If you don’t rely on the statement at all, then it’s not misrepresentation.
Atwood v small
Verification - what if a statement states -company worth 300,000 pounds but worth checking into.?
No verification is necessary. It can still count as misrepresentation
Redgrave v Hurd
However, if true position is set out in contract, then thats not the case.
Peekay v Australia
Though not with consumers - Curtis v cleaning
What about statements of intention?
Statement of intention wont amount to misrep unless it can be shown that intention was never held. Ie money borrowed for one reason, when actually all along for something else
Edgington v Fitzmaurice
Remedies for misrepresentation. What is the effect of misrepresentation?
The effect of misrepresentation is to make the contract voidable. Valid until innocent party rescinds
How can you rescind?
Let the other party know.
If that’s impossible, a reasonable attempt
Car v Caldwell
Effect of rescission?
Neither party need perform any future obligations.
Each party returns money/property to one another.
What are the 4 bars to rescission?
Delay
Affirmation
An innocent party gaining interest in the property
Impossible substantially to restore goods/property
What’s the case for delay as a bar to rescission?
Leaf v international galleries
Affirmation as a bar to rescission
Can be implied or express
Where it is impossible to substantially restore goods/property? Whats the case.
Crystal palace v Dowie
Although, rescission does not have to be exact
Erlanger v Sombrero
Damages in lieu of rescission. Set out when they will be used.
Section 2(2) of the Misrepresentation Act 1967 at the discretion of the court
Misrep must be non-fraudulent
Won’t be awarded if any bars to rescission
Usually only when misrep is regarding minor matter where rescission would be i equitable
What has to be proved for fraudulent misrep?
That the statement was made knowingly without belief in its truth ( or reckless and careless to the veracity of the statement)
Derry v Peek
How are damages awarded for fraudulent misrep?
Tortious rules apply. Put party in position had contract and misrep not been made.
Usual rules of remoteness dont apply
Non-fraudlent misrep - how are damages awarded?
Section 2(1) of misrep act
Once c has established misrepresentation, d must prove he had reasonable grounds to believe and did honestly believe up to the time of contract was made that the facts represented were true
Hard - Howard Ogden v marine
Royscott means fraudulent and non-fraudulent misrep are done in same way.
Criticised by lord steyn in Smith v Scrimgeour
East v Maurer
In calculating damages, if it can be shown that C would’ve bought another business, he will be awarded his original capital and a bit more to take account of the profit he might’ve made from that business
