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Contract Law > Misrepresentation > Flashcards

Misrepresentation Flashcards

1
Q

What statement is required for a misrepresentation claim?

A

False statement of fact or law to induce contracting

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2
Q

When must the statement take place for it to be misrepresentation ?

A

The clear and unambiguous statement must take place before the contract

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3
Q

To whom can the misrepresentation be made?

A
  1. Innocent party
  2. A third party
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4
Q

What is a false statement?

A

Not substantially correct

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5
Q

What is a statement of fact?

A

Present or past conditions

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6
Q

Is a statement of opinion a statement of fact?

A

No - if honestly, genuinely and reasonably held

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7
Q

Is a promise misrepresentation?

A

No, it goes beyond a statement

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8
Q

is a statement of future events a misrepresentation?

A

No

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9
Q

Is a statement of intention misrepresentation?

A

Maybe, if the person making it knew it was false when they made it

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10
Q

Is silence typically misrepresentation?

A

No

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11
Q

Is there a duty on a party to disclose facts?

A

no

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12
Q

When is disclosure of facts required?

A

When there is fiduciary duty between the parties

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13
Q

What is ubberimae fidei (utmost good faith) ?

A

Contracts which require utmost good faith and one party has knowledge essential to the contract which is impossible for the other party to check

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14
Q

Is a partial nondisclosure (a half truth) that is technically true but still misleading misrepresentation?

A

Yes

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15
Q

If you make a statement that is initially true but later becomes untrue before you sign a contract, do you have a duty to correct it, and if you fail to do so, is this misrepresentation?

A

Yes and Yes

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16
Q

Does the misrepresentation have to be the sole reason for the innocent party entering into the contract?

A

No, but it must be a substantial reason

17
Q

What is the test the court will use to determine if the innocent party was induced by the false statement?

A

Viewed objectively, a reasonable person in claimant’s position would have been influenced by the false statement

18
Q

Are “ad speak” or “puff” misrepresentations?

19
Q

What are the three types of misrepresentation?

A
  1. Fraudulent misrepresentation
  2. Negligent misrepresentation
  3. Innocent misrepresentation
20
Q

What is fraudulent misrepresentation?

A

You make a statement
1. Knowingly
2. Recklessly (careless as to its truth) OR
3. Without belief in its truth

21
Q

What is negligent misrepresentation?

A

You cannot prove that you had reasonable grounds for believing, and did believe, that the facts represented were true

22
Q

What is innocent misrepresentation?

A

A misstatement not made fraudulently or negligently

23
Q

What are the remedies for misrepresentation?

A
  1. Voidable
  2. Rescission
  3. Damages
24
Q

Is a contract voidable for any type of misrepresentation?

25
Q

Is rescission available and what is rescission?

A

Yes for all three types and it unwinds the contract to put parties back in their previous position

26
Q

Is rescission an equitable remedy and if so, what is the effect?

A

Yes, the courts have a discretion to grant this

27
Q

What is required for rescission?

A
  1. Notification or a court order
  2. Indemnity - court may order that the misrepresentor provide an indemnity to restore the pre-contract position
28
Q

What are the bars to rescission?

A
  1. Affirmation of the contract
  2. Lapse of time
  3. Impossibility of restitution
  4. Third-party rights (third party acquires rights)
29
Q

What is affirmation?

A

You find out about the misrepresentation and you continue with the contract (by a statement or conduct)

30
Q

When does the clock run for lapse of time to bar rescission?

A
  1. For all types other than fraudulent - from the time you discover, or should have discovered, the misrepresentation
  2. For fraudulent misrepresentation - from the date the fraud was uncovered
31
Q

What is impossibility of restitution?

A

Impossible to restore parties to pre-contractual position as goods have declined in value or nature of subject matter changed

32
Q

How are damages dealt with for fraudulent misrepresentation?

A

Tort of deciet
Put innocent party back in position they would have been but for the misrepresentationWh

34
Q

Are damages available for innocent misrepresentation?

A

No, but damages can be awarded in lieu of rescission

35
Q

When are damages in lieu of rescission typically awarded?

A

For minor misreprsentations

36
Q

What is the measure of damages usually awarded?

A
  1. Losses from entering the contract
  2. Incidental expenditure
    Unlike for breach of contract which puts parties in position they would have been

Contract Law (14 decks)

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