Law cap 14/03 Flashcards
Misrepresentation intro
Misrepresentation is when a party to a contract makes an untrue statement is mad during negotiations, on which the other party relies on, and was induced into the contract by. The statement complained of must have been made before or at the time of the contract.
- Briefly explain why you think there has been a misrep.
Misrepresentation step 1
- The statement made must be false
-Identify what makes the statement a misrep using the following rules:
1- An opinion will not be a misrep (Bisset vs Wilkinson)
2- The statement will not be a misrep if the person making it, could not, based on the evidence, have had that opinion or intention (Edgington vs Fitzmaurice)
3- The statement is a misrepresentation by actions or conduct (Spice Girls vs Aprilia world
4- Silence cannot be a misrepresentation. There is no obligation on a person to make any statement, but anything said must be true (Fletcher vs Krell)
Misrepresentation part 1 - when will silence amount to a misrep
Silence can be a misrepresentation if:
- The person only reveals a part truth and deliberately withheld other information (Dimmock vs Hallet)
- If the statement made was true, then circumstances changed and the statement became untrue as a result, but you died not correct the statement ( With vs OFlannagan)
Misrep step 1 side rules
- Side rule 1: Trust relationships. With relationships built on trust, any breach of that trust will always be a misrepresentation (Tate vs Williamson)
- side rule 2 : Contracts of utmost good faith. All material facts ,must be disclosed whether they have been asked for or not. If you fail to do this, then this is a misrep (Lambert vs Co-Operative insurance)
Misrepresentation step 2
Has the misrepresentation induced the other party into the contract? This means that the statement must be a critical part of making the decision (Atwood vs Small).
- Apply to the scenario- why did they enter the contract? Was there anything else that they could have been induced by?
Misrepresentation step 3
-You must identify the types of misrep and state why it is untrue:
There are three types of misrep: Fraudulent, negligent , and innocent
1- Fraudulent= a false statement is made without nay belief that it is true
2- Negligent- You believe that the statement was true, but you had no reasonable grounds for having that belief.
3- Innocent= You believed that the statement was true and you did have reasonable grounds to believe the statement was true. You have just made a mistake.
Misrep step 4
Apply remedies available:
- Rescission means that the contract is “Unscrambled” so that both parties are returned to their pre contract positions. This is an equitable remedy, so will only be granted if the courts deem it to be fair and possible in all the circumstances to both sides.
- Damages- all actual damage or loss flowing directly from the misrep is claimable
Explain the defences and remedies for each type of misrep
- Fraudulent- The only defence you have is if you believed the statement you made was true (Derry vs Peak). remedies= rescission and/ or damages
- Negligent- S.2(1) Misrepresentation act 1967: the only defence is the person making the statement had reasonable grounds to believe the statement was true. Remedies= rescission and / or damages.
- Innocent- The only remedy is rescission, but under S.2(2) of misrep act 1967, the courts could give you damages instead at their discretion.
Discharge by Frustration Introduction
This is where the contract becomes impossible to perform, due to a frustrating event. Frustration require performance as envisaged in the contract to become impossible as a result of outside events beyond the control amnd contemplation of the parties.
Discharge by frustration strict rule
The strict rule is that parties will be bound to perform their duties regardless of what happens (Paradine vs Jane)
- Apply strict rule to the scenario
Discharge by frustration stage 2 summary
Stage 2- identify the possible grounds for frustration.
1- Impossibility of performance
2- Subsequent illegality
3- Radical change in circumstances
Types of frustration- type 1
- Impossibility of performance- The contract will be frustrated if the contract is impossible to perform (Taylor vs Caldwell). This can be due to the place, the person, or the “thing” becoming unavailable.
- Side rule- Ina contract for services, the frustrating event may be the unavailability of the party who is to perform the service (Robinson vs Davidson)
Types of frustration- type 2
2- Subsequent Illegality- The contract will be frustrated if a change in law makes the contract illegal to perform (Denny, Mott&Dickinson Ltd)
Types of Frustration- type 3
3- Radical change in circumstances- The contract will be frustrated if the essential purpose of the contract cannot be achieved, meaning there is now no point in the contract (Krell vs Henry)
Frustration stage 3
- Identify the possible counter- arguments to frustration:
1- Self- Induced Frustration (Maritime National Fish Ltd vs Ocean Trawlers Ltd)
2- Contract becoming les profitable/ more difficult to complete (Davis Contractors Ltd)
3- Foreseeable Risk (Amalgamated Investment vs Walker&Sons)
Frustration stage 4
Remedies available to the parties:
-Under Common Law, the contract will be terminated and any pre existing obligations must be carried out, but future obligations need not be completed. Under Law Reform(Frustrated Contracts Act) 1943, section 1:
- S1(2)- Money already paid is recoverable, and any money due is no longer payable
-S1(2)- The court may award compensation to be paid for work done and expenses incurred under the contract before the frustrating event
-S1(3)- The court may order compensation to be paid for any valuable benefit one party may acquire under the contract
frustration stage 5
If there is a valid counterargument, then the other party will be in breach
- apply breach- only relevant one
Breach explained an applied
- Actual= party fails to fulfill obligations- if condition (Poussard vs Spiers)- repudiate and/or claim damages, if warranty only damages (Bettini vs Gye)
-Anticipatory- gives notice (Hochester vs De la tour)- Part can either sue now and claim, or wait for damage to occur then sue .
