misrepresentation Flashcards
What is a vitiating factor?
Something that makes a contract void or voidable- it affects the validity of a contract
What is a voidable contract?
The contract is valid but the innocent party can declare the contract invalid and not legally binding. Misrepresentation is an example of this.
What is misrepresentation?
A false statement of fact made by a party in the contract that induces the other party to enter the contract.
What are the key elements of misrepresentation?
-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
What is a false or misleading statement? (and case)
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.
What is the general rule for silence or non disclosure? (with case)
Fletcher v Krell- usually, silence or non disclosure is not a false statement.
What are the exceptions to the general rule for silence or non disclosure?
-Where the contract involves utmost good faith
-Making a half true statement
-Circumstances changing after a statement was made
-Consumer rights
What sort of cases does utmost good faith usually apply to?
Insurance cases.
What is the rule about silence or non disclosure for contracts of utmost good faith?
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.
What is the rule about silence or non disclosure for making a half true statement?
Dimmock v Hallett- making statements that are technically true but fail to reveal the full situation can be misrepresentations.
What is the rule about silence or non disclosure for circumstances changing after a statement was made?
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.
What is the rule about silence or non disclosure for consumer rights?
If a business leaves out or hides any important information that helps a consumer make an informed choice, this can be a misrepresentation.
In which situations will the statement not be of fact?
-Statements of opinion
-Statements of future intention or conduct
-Puff or mere sales talk
What is the general rule for statements of opinion?
Bisset v Wilkinson- statements of opinion will not amount to statements of fact and therefore they are not actionable.
When can statements of opinion be a misrepresentation?
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.
What is the general rule for statements of future intention or conduct?
A statement that expresses future intention is speculation rather than fact.
When can statements of future intention or conduct be a misrepresentation?
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.
What is puff or mere sales talk?
Sales talk (puff) are considered empty boasts rather than factual statements. Eg. Redbull gives you wings
In which case was the statement mere sales talk?
Dimmock v Hallett - te court said the statement was too vague to make a reasonable person enter a contract
In which case was the statement more than mere sales talk?
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’
Explain the factor - The false statement was made by a party to the contract
if a statement is made by a third party (eg. a reviewer on amazon), this is not misrepresentation
What are the two points about inducing a party?
- 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
What was the decision is Horsefall v Thomas?
since the buyer did not examine the gun, he did not know of the concealment, and therefore did not know of the misrepresentation
