Misrepresentation Flashcards
What are the steps for misrepresentations?
Define
False statement
Material fact
Made by a party (agents)
Induced them to enter contract
Misrepresentations in consumer context
Types: Innocent, Negligent, Fraudulent
Remedies for each type
What is a misrepresentation?
A statement that influences a decision on whether or not to make a contract and it being false - this makes a contract voidable
What is a false statement?
A statement that is not true or accurate
Is silence generally a misrepresentation? And by what principle is this the case?
No (but there are exceptions)
Caveat emptor - let the buyer beware
Which case shows silence generally isn’t a false statement?
Fletcher v Krell
Can statements become misrepresentations if they become untrue?
Yes, even if it was true at the time
Which case shows a statement becoming misrepresentation despite being true at the time?
With v O’Flanagan
When can silence be a misrepresentation?
When a statement becomes untrue the party needs to correct the information - sometimes they will need to disclose the whole truth.
AND/OR
Where the relationship between the parties is based on trust
Which case shows silence being a misrepresentation due to a statement becoming untrue?
Dimmock v Hallett
Which case shows silence being a misrepresentation due to the relationship being based on trust?
Tate v Williamson
What is required for a contract of the utmost good faith?
All material facts must be disclosed (e.g. insurance contracts)
Which case shows a contract of the utmost good faith?
Lambert v Co-operative Insurance Society Ltd
What mode do statements have to be in?
Written, verbal or anything that would influence the other’s decision
What is a material fact?
A fact (not opinion) which would have led a reasonable person to make the contract and did influence the mind of the person making the contract
Which case shows a false statement isn’t a misrepresentation if it is not a material fact?
Bisset v Wilkinson
Edgington v Fitzmaurice
Is a person liable for statements made by others?
No, unless they are their agent (someone who stands in their shoes)
What is meant by the misrepresentation must have induced the party into entering the contract?
The statement must lead the party into making the contract and be a critical part of making the decision
Which case shows the misrepresentation must induce them into making the contract?
Attwood v Small
Does it matter if the victim could’ve discovered the truth by taking reasonable steps?
No
Does it matter if it was unreasonable to rely on the untrue statement?
No
Which case shows that it doesn’t matter if the victim could’ve discovered the truth?
Redgrave v Hurd
Is what the reasonable person would’ve (not) done relevant?
No
Which case shows it is irrelevant what the reasonable person would’ve done?
Museprime Properties Ltd v Adhill Properties Ltd
What is different about misrepresentations in consumer context?
All consumer information must be displayed clearly, otherwise it will be considered misleading if they omit material information, hide or provide information in an unclear manner, or fails to identify the commercial intent (can sue for silence here)
Which Act shows misrepresentations in a consumer context?
Consumer Rights Act 2015 as well as:
Consumer Protection (Amendment) Regulations 2014
What are the 3 types of misrepresentation?
Innocent
Negligent (under common law and under Misrepresentation Act 1967)
Fraudulent
What is an innocent misrepresentation?
Where they genuinely held on reasonable grounds (e.g. if official information is incorrect)
What is the difference between the 2 types of negligent misrepresentation?
The burden of proof is on the claimant for common law, but on the defendant under the act (always on a balance of probabilities)
What is a negligent misrepresentation?
Where they had no reasonable grounds for believing it to be true
Which case did negligent misrepresentation under the common law come from
Hedley Byrne & Co Ltd v Heller & Partners Ltd
What did Hedley Byrne tell us about negligent misrepresentation?
You can sue for negligent words if they failed to be a reasonable expert
What does the Misrepresentation Act 1967 tell us about negligent misrepresentation?
Here, the defendant must prove that they did have reasonable grounds for believing the statement was true in order to avoid liability
Which case shows negligent misrepresentation under the Misrepresentation Act 1967?
Howard Marine v Ogden
What is fraudulent misrepresentation?
They lied - it has origins in the tort of deciet
Which case shows a fraudulent misrepresentation?
Derry v Peek
How did Lord Herschell define fraudulent misrepresentation?
A statement which was made:
knowing it to be false,
without belief in its truth,
or recklessly, careless as to whether it be true or false
Can overemphasising positives be a misrepresentation?
Yes - it is a rose-tinted view
Which case shows overemphasising positives can be a misrepresentation?
Greenridge v Kempton
What are the remedies for innocent misrepresentation?
Rescission
Damages (at the court’s discretion)
What is rescission?
Putting the parties back in the position they were in before the contract was made
When is rescission not available?
When:
Restitution is available
The contract is affirmed
Delay
A 3rd party has gained rights over the property
What is affirmation?
Where the innocent party carries on with the contract despite being aware of the misrepresentation
What are the remedies for negligent misrepresentation?
Rescission and/or damages (decided via Hedley Byrne) - contributory negligence may apply
What are the remedies for fraudulent misrepresentation?
Rescission and damages to put them back in the position they were in beforehand
