Misrepresentation 1

Question 1

Misrepresentation

Answer 1

False statement of fact which induced the other party to enter into a contract.

Question 2

Legal source of misrepresentation:

Answer 2

Misrepresentation Act 1967

Question 3

What does it mean when a contract is rendered voidable?

Answer 3

Can be set aside by one party using rescission. Once set aside it is treated like it never existed.

Question 4

What does it mean when a contract is rendered void?

Answer 4

Automatically of no effect from the very beginning.

Question 5

Silence does not amount to misrepresentation:

Answer 5

No general duty in pre-contractual negotiations to state facts not known to the other party

Keates v Cadogan

Question 6

Exceptions to the rule that silence does not amount to misrepresentation:

Answer 6

Half truth

Change of circumstances

Question 7

What is a Half Truth?

Answer 7

True statement that fails to represent entire picture.

Dimmock v Hallet

Question 8

Change of circumstance:

Answer 8

Statement was true at first, but becomes false due to a change of circumstance.
WIth v O’flanagan

Question 9

What do not count as statements of fact?

Answer 9

• Statements of belief or opinion
• Statements of future conduct/ intention
• Abstract statements of the law

Question 10

An opinion is not a statement of fact:

Answer 10

Not deemed a factual statement when both parties know that the statement maker has no basis in fact.

Bisset v Wilkinson

Question 11

Exceptions to the rule that an opinion is not a statement of fact:

Answer 11

Statement maker is in a stronger position to know the truth.

Smith v Land and House Property Corporation

Question 12

Statement of future conduct is not a statement of fact:

Answer 12

A false statement made regarding future intentions is not misrepresentation.

HOWEVER

If they lied about it (evidence required) then it is misrepresentation.

Edgington v Fitzmaurice

Question 13

Abstract statements of law are not statements of fact:

Answer 13

Cannot be statement of fact.

HOWEVER

Statements of law applied to a set of facts will be construed as statements of fact.

Pankhania v Hackney London Borough Council

Question 14

Inducement

Answer 14

Coercing/ persuading another party into entering a contract.

Question 15

Inducement must be material:

Answer 15

Important enough to influence reasonable person,

Downs v Chappel

Question 16

If a claimant makes his/ her own investigations:

Answer 16

Then they are not induced by misrepresentation.
Attwood v Small

HOWEVER

Attwood v Small only has application where parties rely solely on their own investigations.

Question 17

With v O’Flanagan

Answer 17

Where a statement is rendered false by a change of circumstance, there is a duty to disclose the change.

Question 18

Dimmock v Hallett

Answer 18

Defendant selling some land, tells buyer that all farms were under tenancy. Defendant failed to disclose that tenants had given their notice.

It was held that telling half truths about the tenants constitutes grounds for unwinding the contracts.

Question 19

Edgington v Fitzmaurice

Answer 19

Company was selling shares under the guise of expanding the company, when they were really being used to settle debts.

It was held, that although it was a statement of future intent, it was an actionable misrep as the defendant has no intention of expanding the company.

Question 20

Smith v Land and House Property Corporation

Answer 20

Claimant bought a hotel which seller described as ‘most desirable’. The seller knew that the tenant was
nearly bankrupt and neglected to inform the buyer

It was held that the statement was one of fact rather than opinion as the seller was in a strong position to know the truth..