misrepresentation

Question 1

What is a vitiating factor?

Answer 1

Something that makes a contract void or voidable- it affects the validity of a contract

Question 2

What is a voidable contract?

Answer 2

The contract is valid but the innocent party can declare the contract invalid and not legally binding. Misrepresentation is an example of this.

Question 3

What is misrepresentation?

Answer 3

A false statement of fact made by a party in the contract that induces the other party to enter the contract.

Question 4

What are the key elements of misrepresentation?

Answer 4

-Makes a false/untrue statement
-Statement is of fact
-Made by a party to the contract to the other party
-The statement induced the other party to enter into the contract

Question 5

What is a false or misleading statement? (and case)

Answer 5

Spice Girls v Aprilia World Service- making a statement should be interpreted broadly to include written and verbal statements, pictures, advertising. packaging and even conduct.

Question 6

What is the general rule for silence or non disclosure? (with case)

Answer 6

Fletcher v Krell- usually, silence or non disclosure is not a false statement.

Question 7

What are the exceptions to the general rule for silence or non disclosure?

Answer 7

-Where the contract involves utmost good faith
-Making a half true statement
-Circumstances changing after a statement was made
-Consumer rights

Question 8

What sort of cases does utmost good faith usually apply to?

Answer 8

Insurance cases.

Question 9

What is the rule about silence or non disclosure for contracts of utmost good faith?

Answer 9

Lambert v Co-op Insurance Society- non disclosure of information in cases with very high levels of honesty with each other (insurance cases) will be a misrepresentation.

Question 10

What is the rule about silence or non disclosure for making a half true statement?

Answer 10

Dimmock v Hallett- making statements that are technically true but fail to reveal the full situation can be misrepresentations.

Question 11

What is the rule about silence or non disclosure for circumstances changing after a statement was made?

Answer 11

With v O’Flanaghan- there is a legal obligation to tell the buyer of the change in circumstances if the new situation makes the previous statement false.

Question 12

What is the rule about silence or non disclosure for consumer rights?

Answer 12

If a business leaves out or hides any important information that helps a consumer make an informed choice, this can be a misrepresentation.

Question 13

In which situations will the statement not be of fact?

Answer 13

-Statements of opinion
-Statements of future intention or conduct
-Puff or mere sales talk

Question 14

What is the general rule for statements of opinion?

Answer 14

Bisset v Wilkinson- statements of opinion will not amount to statements of fact and therefore they are not actionable.

Question 15

When can statements of opinion be a misrepresentation?

Answer 15

Smith v Land and House Property Corp- if the opinion is given by a person with special knowledge or skill, this can amount to a misrepresentation.

Question 16

What is the general rule for statements of future intention or conduct?

Answer 16

A statement that expresses future intention is speculation rather than fact.

Question 17

When can statements of future intention or conduct be a misrepresentation?

Answer 17

Edgington v Fitzmaurice
If a party states they intend to do something but they actually have no intention of doing that thing, this can amount to a statement of fact.

Question 18

What is puff or mere sales talk?

Answer 18

Sales talk (puff) are considered empty boasts rather than factual statements. Eg. Redbull gives you wings

Question 19

In which case was the statement mere sales talk?

Answer 19

Dimmock v Hallett - te court said the statement was too vague to make a reasonable person enter a contract

Question 20

In which case was the statement more than mere sales talk?

Answer 20

Carlill v Carbolic Smoke ball Company - D had made it quite clear that they were serious about the rewards, this was more than just ‘sales talk’

Question 21

Explain the factor - The false statement was made by a party to the contract

Answer 21

if a statement is made by a third party (eg. a reviewer on amazon), this is not misrepresentation

Question 22

What are the two points about inducing a party?

Answer 22

• The representee must have known about the existence of the false statement
• the false statement must have materially affected the representees decision to enter into the contract

Question 23

What was the decision is Horsefall v Thomas?

Answer 23

since the buyer did not examine the gun, he did not know of the concealment, and therefore did not know of the misrepresentation