Legal tests Flashcards
What is the test for whether a misrepresentation is a term of the contract?
Arguably the primary test is of Contractual Intention - is there evidence of an intention by one or both parties that there be contracual laiblity in respect of the accuracy of the statement (Heilbut Symons (1913))
However the judgements of Lord Denning in Oscar Chess & Dick Bentley cast doubt on whether the test is still one of intention or now of fault - if a party ought to have known their statement was true then it is a part of the contract (Dick Bentley), but if it was none the wiser then it is not part of the contract (Oscar Chess).
What is the test for ‘common mistake’ so as to render a contract void?
A contract is void for common mistake when:
- Res Sua: there is mistake as to ownership. i.e. the party contracts to purchase something that already belongs to him/her.
- Res extincta: both parties enter into a contract with the belief that the subject matter exists when in fact it does not exist.
- Quality: Mistake as to quality will only render a contract a void when it is ‘common’ and makes the thing without the quality essentially different from the thing as it was believed to be. ‘Essential difference is treated very narrowly: e.g. a modern copy of an old master’s painting is not essentially different from the original.
As per Lord Atkin in Bell v Lever Bros [1932].
Howver N.b. Great Peace where the majority sets out the requirements as:
(i) common
(ii) no warrranty by either party as to the existence of the state of affairs
(iii) no party is at fault in bringing about the state of affairs
(iv) the state of affairs must render the contract impossible
When is a statement a fraudulent misrepresentation?
Derry v Peek (1889) (HL):
- A fraudulent misrepresentation is one made knowing that it is false or reckless as to whether it is true or false.
- The essential feauture is an absence of honest belief that the state is true - there is no need for clear knowledge that the statement was false.
