Material Fact

Question 1

material fact in terms of misrepresentation

Answer 1

the misrepresentation must be of material fact- this means that it led the person to enter into the contract, and did in fact influence the mind of the person making the contract

Question 2

what must material fact be?

Answer 2

material fact must be a statement of fact, not an opinion. If an opinion is given it doesn’t matter if the person giving it believed it, or if it induced the other to enter into the contract, it is not misrepresentation.

Question 3

Bisset v Wilkinson

Answer 3

facts: seller of farmland was asked how many sheep it could take, seller had no experience but said he thought it could take 2000.
held: this was false but held not to be misrepresentation.
principle: innocent misrepresentation about land doesn’t void a contract if the seller genuinely believed it.

Question 3

Edgington v Fitzmaurice

Answer 3

facts: Edgington subscribed for shares based on false statements made by Fitzmaurice, a company director.
held: court ruled in favor of Edgington
principle: False statements made with intent to deceive, even if not directly addressed, constitute fraudulent misrepresentation.

Question 4

Smith v Land and House Property Corp

Answer 4

facts: the company misrepresented its financial position to investors, leading to a dispute over the validity of share contracts.
held: investors could cancel share contracts due to the company’s misrepresentation of its financial position.
principle: investors can void share contracts if the company misrepresents its financial condition.