Misrepresentation

Question 1

Vitiating factor meaning

Answer 1

Something that makes a contract void (never had legal effect) or voidable (can be made void or can continue)

Question 2

Effect of misrepresentation

Answer 2

Makes contract voidable - valid unless party who has suffered seeks to end it. Rescission available at courts discretion which would put parties back in the position they were before the contract.

Question 3

Elements of misrep

Answer 3

• a false statement
• of material fact
• made by a party to the contract
• that induces the other party to enter the contract

Question 4

False statement

Answer 4

Written, verbal or by conduct (Spice Girls v Aprilia World)
Silence cannot be misrepresentation (Fletcher v Krell), unless;

Change of circumstances
A person must correct information between the representation and acceptance of the offer (With v O’Flanagan)

Half-truths
May be misrep where a statement made is a half truth (Dimmock v Hallett)

Based on trust
Silence can be misrep where a relationship is based on trust (Tate v Williamson)

Contracts of utmost faith
For example insurers (Lambert v Co-Operative Insurance Society)

Question 5

Material fact

Answer 5

Opinion
Honestly held means no misrep (Bisset v Wilkinson)
Statement of intention is generally not fact unless there is no intention to carry out promise (Edgington v Fitzmaurice)
Where an opinion is not honestly held is can be misrep (Smith v Land and House Property)

Question 6

Made by a party to the contract

Answer 6

Not liable for statements made by others unless they are an agent

Question 7

Induces the other party to enter the contract

Answer 7

Atwood v Small - must rely on it, not get a 2nd opinion
Redgrave v Hurd - doesn’t have to be reasonable to rely on statement or something that could be confirmed elsewhere
Museprime Properties v Adhill Properties - doesn’t matter whether it was reasonable to rely on

Question 8

CRA 2015 and misrep

Answer 8

S12 - Misleading omission is when trader deliberately misses out key information. Must be displayed clearly

Question 9

Innocent misrep

Answer 9

Misrepresentation act 1967
Statement made honestly with no negligence
Rescission or damages

Question 10

Negligent misrep

Answer 10

Following Hedley Byrne
Can sue under negligence or Misrepresentation Act 1967
Must be a misrepresentation that results in a contract and the victim suffers loss

Rescission and / or damages

Question 11

Fraudulent misrep

Answer 11

Statement made without belief in the truth - knows it to be untrue or is reckless as to whether it is
Derry v Peek - honestly and reasonably believed permission to be a formality, but could be considered reckless
Greenbridge Luton One v Kempton Investments - includes over optimism

Rescission and damages

Question 12

Damages for misrep

Answer 12

Rescission is an equitable remedy so it is discretionary and will only be awarded if it is fair in all the circumstances to do so

It is not available when
1. Restitution to pre-contract position is impossible (Clarke v Dickinson)
2. Contract is affirmed - innocent party continues despite being aware of the misrep. (Long v Lloyd)
3. Delay - complaints must be a short time after completion. (Leafy v International Galleries)
4. 3rd party has gained rights over the property - would be unfair to them to return property. (Lewis v Averay)

Damages
Calculated according to tort and Hedley Byrne. Principle of contributory negligence can apply.
Same as fraud (Royscot Trust v Rogerson)
Can sue for loss of profit (East v Maurer)
Damages may be deemed more fair (Sindall v Cambridgeshire County Council)