False Peliminary Statement

Question 0

What are the classification of statements you need to assess in a question?

Answer 0

Puff -
Representation
Term

Question 1

If there is not a valid contract, or you are not sure there is a valid contract, what do you need to consider?

Answer 1

A claim for negligent misstatement. Hedley Byrne principle of a special relationship.
Camparo tests
Pure economic loss is claimable

Question 2

What factors need addressing before addressing whether the statement is a term or representation?

Answer 2

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

Question 3

What is the primary test for whether a statement is a representation or a term?

Answer 3

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

Question 4

What are the key guidelines for whether a statement is a term or a representation?

Answer 4

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).

Question 5

If the maker of a statement has greater skill and knowledge?

Answer 5

More likely to be a term

Dick Bentley v Harold Smith

Question 6

If the recipient has greater skill and knowledge?

Answer 6

More likely to be a representation

Oscar chess v Williams

Question 7

Is the oral statement is repeated in contract?

Answer 7

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

Question 8

If there has been a delay between making the statement and contract?

Answer 8

More likely to be representation?

Routledge v Mckay

Question 9

Did the recipient of the statement make it clear it was of vital importance?

Answer 9

If so - more likely to be a term

Bannerman v White

Question 10

Did the maker ask the recipient to verify the statement?

Answer 10

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

Question 11

If the statement is deemed a term what do you do?

Answer 11

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.

Question 12

What is the definition of a misrepresentation?

Answer 12

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.

Question 13

Is silence normally a statement that could be misrepresentation?

Answer 13

No.

Hamilton v Allied Domecq

Apart from fiduciary duties. Or contracts of the utmost good faith

Question 14

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.

Answer 14

Failure to disclose the change in circumstances may amount to misrepresentation

With v O’Flanagan

Question 15

The statement must be a fact. But can an opinion still be misrep?

Answer 15

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).

Question 16

Conduct can amount to misrepresentation.

Answer 16

Spice girls v Aprilla

Question 17

Half truths can be misrepresentations?

Answer 17

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

Question 18

What if you act on external advice? Ie go and ask a professional surveyor after your mate says a house is fine.

Answer 18

If you don’t rely on the statement at all, then it’s not misrepresentation.

Atwood v small

Question 19

Verification - what if a statement states -company worth 300,000 pounds but worth checking into.?

Answer 19

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

Question 20

What about statements of intention?

Answer 20

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

Question 21

Remedies for misrepresentation. What is the effect of misrepresentation?

Answer 21

The effect of misrepresentation is to make the contract voidable. Valid until innocent party rescinds

Question 22

How can you rescind?

Answer 22

Let the other party know.

If that’s impossible, a reasonable attempt
Car v Caldwell

Question 23

Effect of rescission?

Answer 23

Neither party need perform any future obligations.

Each party returns money/property to one another.

Question 24

What are the 4 bars to rescission?

Answer 24

Delay
Affirmation
An innocent party gaining interest in the property
Impossible substantially to restore goods/property

Question 25

What’s the case for delay as a bar to rescission?

Answer 25

Leaf v international galleries

Question 26

Affirmation as a bar to rescission

Answer 26

Can be implied or express

Question 27

Where it is impossible to substantially restore goods/property? Whats the case.

Answer 27

Crystal palace v Dowie

Although, rescission does not have to be exact

Erlanger v Sombrero

Question 28

Damages in lieu of rescission. Set out when they will be used.

Answer 28

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

Question 29

What has to be proved for fraudulent misrep?

Answer 29

That the statement was made knowingly without belief in its truth ( or reckless and careless to the veracity of the statement)

Derry v Peek

Question 30

How are damages awarded for fraudulent misrep?

Answer 30

Tortious rules apply. Put party in position had contract and misrep not been made.

Usual rules of remoteness dont apply

Question 31

Non-fraudlent misrep - how are damages awarded?

Answer 31

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

Question 32

East v Maurer

Answer 32

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