Misrepresentation

Question 1

What are the elements of an actionable misrepresentation?

Answer 1

The elements of an actionable misrepresentation include: unambiguous, false, statement of fact, addressed to the claimant, and induces the claimant to enter into the contract with the statement maker.

Question 1

What is the general rule regarding silence as a statement of fact?

Answer 1

The general rule is that silence does not amount to a statement of fact, whether it is a statement of fact or otherwise.

Question 2

Are there special rules for certain types of statements?

Answer 2

Yes, there are special rules for statements of law, opinion, future intention, or silence.

Question 3

What qualifies as a representation in contract law?

Answer 3

A representation is a statement asserting the truth of a given state of facts. It can be made during negotiations leading to a contract and may qualify as a ‘representation’.

Question 4

Under what circumstances does silence give rise to an action for misrepresentation?

Answer 4

In most cases, mere silence will not give rise to an action for misrepresentation. However, there are exceptions to this general rule, such as half-truths, continuing representations, and contracts uberrimae fidei (contracts of utmost good faith).

Question 5

When is inducement inferred in relation to a statement?

Answer 5

If the statement is material, inducement will be inferred. If the statement is not material, then inducement must be proved.

Question 6

What is the difference between fraudulent, negligent, and innocent misrepresentation?

Answer 6

Fraudulent misrepresentation is made knowingly, without belief in its truth, or recklessly. Negligent misrepresentation occurs when the representor fails to show reasonable grounds to believe the statement or does not believe it to be true. Innocent misrepresentation is made neither fraudulently nor negligently, where the representor had reasonable grounds for belief and believed the statement to be true. As such, no damages are available as of right for an innocent misrepresentation.

Question 7

What is the principle of ‘continuing representations’?

Answer 7

The principle of ‘continuing representations’ states that if, at the beginning of negotiations, a statement is made that is true but later becomes false before entering into the contract, the representor has an obligation to correct the representation. Failure to do so can lead to liability for misrepresentation.

Question 8

What are the main remedies for misrepresentation?

Answer 8

The main remedies for misrepresentation are rescission and damages. Rescission involves putting the parties back in their pre-contractual positions, while damages refer to a payment of money.

Question 9

What is the difference between an actionable representation and a non-actionable representation?

Answer 9

An actionable representation is an unambiguous false statement of fact made to the claimant that induces them to enter into a contract. A non-actionable representation may include statements of opinion, intention, or silence.

Question 10

Which types of statements do not normally amount to misrepresentation?

Answer 10

Statements of opinion, statements of future intention, and silence do not normally amount to misrepresentation.

Question 11

When can a statement of opinion be considered a misrepresentation?

Answer 11

If a representor is in a position of superior knowledge or experience, a statement of opinion by them may be held to involve a statement of fact that there are reasonable grounds for their opinion. If there are no reasonable grounds for that opinion, a false statement has been made.

Question 12

What is the classic definition of fraudulent misrepresentation?

Answer 12

The classic definition of fraudulent misrepresentation was given in the case of Derry v Peek (1889) 14 App Cas 337 in the House of Lords. It requires proof of fraud, which can be shown when a false representation has been made knowingly, without belief in its truth, or recklessly.

Question 13

What is the distinction between an indemnity and the common law right to damages in relation to misrepresentation?

Answer 13

An indemnity covers expenses or obligations arising from the contract, while damages compensate for losses suffered. The availability of damages depends on the type of misrepresentation, whereas an indemnity would be awarded for innocent misrepresentation.

Question 14

What is the burden of proof in a claim for fraudulent misrepresentation?

Answer 14

The burden of proving that a misrepresentation was fraudulently made is on the claimant, and it is a heavy burden to discharge.

Question 15

How is the falsity of a representation determined?

Answer 15

The statement must be false to qualify as a misrepresentation. However, if the statement is substantially correct and the difference between what is represented and what is actually correct would not have likely induced a reasonable person to enter into the contract, it may still be considered true.

Question 16

What is the test for actionability in misrepresentation?

Answer 16

The test for actionability in misrepresentation involves determining if the representation is unambiguous, false, a statement of fact, addressed to the claimant, and induces the claimant to enter into the contract.

Question 17

What is the requirement for establishing negligent misrepresentation under the Misrepresentation Act 1967?

Answer 17

To establish negligent misrepresentation under the Misrepresentation Act 1967, it must be shown that the person making the misrepresentation had reasonable grounds to believe and did believe, up to the time the contract was made, that the facts represented were true.

Question 18

What happens if a representor states an intention they do not actually have?

Answer 18

If a representor states that they intend to do something, but they know they cannot do it or they do not actually intend to do it, they misrepresent their existing intention.

Question 19

Can a statement of law give rise to an actionable misrepresentation?

Answer 19

Traditionally, a statement of law could not give rise to an actionable misrepresentation. However, the distinction between statements of fact and statements of law has been abolished, and a statement of law can now give rise to an actionable misrepresentation.

Question 20

What are the ramifications of being found liable for negligent misrepresentation under the Misrepresentation Act 1967?

Answer 20

If a representor is found liable for negligent misrepresentation under the Misrepresentation Act 1967, they will be treated as if they had made a fraudulent misrepresentation. This has important implications for damages.

Question 21

What is the general rule for rescission?

Answer 21

In order to rescind, the representee must communicate the intention to do so to the representor. Alternatively, the representee may initiate proceedings for rescission of the contract.

Question 22

How does inducement play a role in establishing misrepresentation?

Answer 22

Inducement is established if the representation would have influenced a reasonable person or if the representee personally was induced by the statement. The misrepresentation must have caused the representee to enter into the contract. However, inducement cannot be inferred if the statement was not communicated, did not affect the representee’s decision, or was known to be untrue by the representee.

Question 23

What difficulties can arise in categorizing a misrepresentation based on a change of circumstances?

Answer 23

Difficulties can arise in categorizing a misrepresentation based on a change of circumstances. Failure to disclose a change in circumstances may not automatically be considered fraudulent, as it could be due to inadvertence or a failure to realize the duty of disclosure. Proof of deliberate or dishonest failure to disclose is required for fraud.

Question 24

What are the bars to rescission?

Answer 24

Rescission may be barred if the contract has been affirmed, if there has been a lapse of time without attempting rescission, if restitution is impossible, or if third party rights have accrued.

Question 25

What is the effect of the Misrepresentation Act 1967 on negligent misrepresentation?

Answer 25

Under the Misrepresentation Act 1967, where a representor is found liable for negligent misrepresentation, they will be treated as if they had made a fraudulent misrepresentation. This means that they can be held liable for damages as if the misrepresentation was fraudulent.

Question 26

What happens when a representee chooses to test the validity of a representation through their own investigations?

Answer 26

If a representee chooses to test the validity of a representation by making their own investigations, they may not be able to bring a claim for misrepresentation. The representee must have relied on the misrepresentation, not their own investigations, for the claim to be actionable.

Question 27

What is the difference between damages for fraudulent misrepresentation and damages for negligent misrepresentation?

Answer 27

Damages for fraudulent misrepresentation are potentially greater, but damages for negligent misrepresentation under s 2(1) MA 1967 can often match those for fraudulent misrepresentation. Damages in lieu of rescission may also be available under s 2(2) for an action brought under s 2(1).

Question 28

What is the test for materiality in establishing inducement?

Answer 28

The test for materiality is an objective one. It asks whether the statement relates to an issue that would have influenced a reasonable person. If the statement is found to be material, inducement will generally be inferred. If the statement is not found to be material, the claimant must prove that they were subjectively induced.

Question 29

What is the effect of an innocent misrepresentation on a contract?

Answer 29

An innocent misrepresentation does not render the contract voidable. However, damages in lieu of rescission may be available under s 2(2) of the Misrepresentation Act 1967.

Question 30

What are the potential remedies available when misrepresentation is established?

Answer 30

The potential remedies available when misrepresentation is established are rescission, damages, and indemnity. Rescission allows the contract to be set aside, damages compensate for losses suffered, and indemnity covers expenses or obligations assumed as a result of the contract.

Question 31

What is the burden of proof in establishing inducement?

Answer 31

If the statement is found to be material, the burden shifts to the defendant to rebut the inference of inducement. The defendant must prove that the claimant was not subjectively induced. If the statement is not found to be material, the claimant must prove that they were subjectively induced.

Question 32

What is the principle of ‘continuing representations’ and how does it apply in the case of With v O’Flanagan?

Answer 32

The principle of ‘continuing representations’ states that if a statement made at the beginning of negotiations is true but becomes false before entering into the contract, the representor has an obligation to correct the representation. In the case of With v O’Flanagan, the seller of a medical practice remained silent about a change in income, which was considered a continuing representation. The duty to disclose the change in circumstances and income was breached.

Question 33

What is the duty to disclose material facts in contracts uberrimae fidei and what is an example of such a contract?

Answer 33

In contracts uberrimae fidei (contracts of utmost good faith), there is a duty to disclose material facts. An example of such a contract is an insurance contract, where disclosure of all material facts must be made to the insurer.

Question 34

What is the role of separate enquiries in determining inducement?

Answer 34

Separate enquiries may show that the purchaser did not rely on the misrepresentation but on their own investigations. In such cases, a claim for misrepresentation may not be successful. However, separate enquiries do not automatically prevent a claim for misrepresentation, and the circumstances of each case must be considered.

Question 35

Under what circumstances can damages be awarded in lieu of rescission?

Answer 35

Damages in lieu of rescission can be awarded when a person has entered into a contract after a misrepresentation has been made otherwise than fraudulently, and the court or arbitrator may declare the contract subsisting and award damages in lieu of rescission if it is equitable to do so. This remedy is available only at the discretion of the court and is only available for negligent and innocent misrepresentation.

Question 36

What types of relationships can give rise to an obligation to disclose information?

Answer 36

Parties in a fiduciary relationship, characterized by trust and obligations of good faith, can have an obligation to disclose information. Examples of such relationships include that between a company and its directors, or between a trustee and beneficiaries of a trust.

Question 37

Can damages be awarded for innocent misrepresentation?

Answer 37

There is no automatic right to damages for innocent misrepresentation. However, the court has the discretion under Section 2(2) of the Misrepresentation Act 1967 to award damages in lieu of rescission. The court must consider the nature and seriousness of the misrepresentation, the loss that would be caused if the contract were upheld, and the loss that rescission would cause to the other party.

Question 38

Under what circumstances might one party owe a duty of care to another in terms of accuracy of statements made?

Answer 38

Where there is a relationship of sufficient proximity between two parties, the court might find that one party owes a duty of care to the other to take reasonable care that statements made are accurate.

Question 39

What is the effect of an exemption clause in relation to misrepresentation?

Answer 39

If a contract contains an exemption clause purporting to protect a party from liability for misrepresentation or to exclude or restrict any remedy available to the other party, the clause will be of no effect except insofar as it satisfies the requirement of reasonableness under Section 3 of the Misrepresentation Act 1967, as substituted by Section 8 of the Unfair Contract Terms Act 1977.

Question 40

What is a non-reliance clause and how does it relate to misrepresentation?

Answer 40

A non-reliance clause is a clause in a contract that states that neither party has made any representations to the other in relation to the contract or its subject matter, and that neither party has relied on any representation from the other in entering into the contract. However, it is doubtful whether an ‘entire agreement’ clause, which states that the agreement constitutes the entire agreement between the parties, would be sufficient to exclude liability for any misrepresentations. Any clause attempting to exclude or limit liability for misrepresentation is subject to the reasonableness test under the Unfair Contract Terms Act 1977.

Question 41

What is the potential outcome of a breach of the duty of care in terms of accuracy of statements made?

Answer 41

A breach of the duty of care in terms of accuracy of statements made may result in a claim in negligent misstatement.

Question 42

What is the law of negligent misstatement and how does it relate to misrepresentation?

Answer 42

The law of negligent misstatement, which is part of the law of negligence, intervenes in relation to false statements that induce the representee to enter into a contract. It establishes a duty of care on the party making the statement to take reasonable care that the statements made are accurate. Negligent misstatement is not limited to statements made during contractual negotiations and can relate to any statements that cause the recipient of the statement loss.

Question 43

When would a party pursue a claim in negligent misstatement instead of misrepresentation

Answer 43

It is rare for a party to pursue a claim in negligent misstatement instead of misrepresentation when a claim in misrepresentation is available. However, in cases where there is a relationship of sufficient proximity between two parties and one party owes a duty of care to the other, a claim in negligent misstatement might be pursued if the statement caused the recipient loss.

Question 44

What factors does the court consider when exercising its discretion to award damages in lieu of rescission?

Answer 44

When exercising its discretion to award damages in lieu of rescission, the court must have regard to the nature and seriousness of the misrepresentation, the loss that would be caused if the contract were upheld, and the loss that rescission would cause to the other party. This discretion is evident in cases such as UCB Corporate Services v Thomason [2005] 1 All ER (Comm) 601.

Question 45

What is the remedy for innocent misrepresentation?

Answer 45

In cases of innocent misrepresentation, the representee is entitled to the remedy of rescission and, if applicable, an indemnity to cover the cost of the legal obligations arising from the contract entered into. Damages for innocent misrepresentation are not an automatic right, but the court has the discretion under Section 2(2) of the Misrepresentation Act 1967 to award damages in lieu of rescission.

Question 46

Which of the following is a statement of fact?

A statement of future intention

Silence

A statement of opinion

Conduct

Answer 46

Conduct

Correct. Statements can also be made by conduct. In the case of Gordon v Selico, the intentional concealment of dry rot was found to be a misrepresentation

Question 47

What is a material representation?

Answer 47

A statement that relates to an issue that would have influenced a reasonable person

Question 48

In what situation will a statement of opinion be elevated to a statement of fact?

Answer 48

Where it is proved that the opinion expressed was not one which the representor believed

This also applies if the opinion expressed is not one which a reasonable man with the knowledge of the representor could have reasonably held

Question 49

Why was the company’s statement of future intention in Edgington v Fitzmaurice found to be a misrepresentation?

Answer 49

At the time the representors made the statement of future intention, they knew that they did not intend to do what they said they would do

Question 50

What is a half-truth?

Answer 50

A statement that is technically true but misleading

Question 51

Why is negligent misrepresentation under the Misrepresentation Act 1967 an easier claim for a claimant to establish than a fraudulent misrepresentation claim?

Answer 51

The normal burden of proof is reversed and the defendant bears the burden of proving that they had reasonable grounds for believing their statement and that they did believe it

Correct. The claimant bears the burden of proof in a claim for fraudulent misrepresentation and it is a difficult burden to discharge. However, the 1967 Act reverses the standard of proof for negligent misrepresentation and places the burden on the defendant to prove that he had reasonable grounds to believe his statement and that he did believe it

Question 52

What is the definition of a fraudulent misrepresentation?

Answer 52

A false representation that was made knowingly or without belief in its truth or recklessly

Question 53

What remedies are potentially available for an innocent misrepresentation?

Answer 53

Rescission, damages in lieu of rescission and indemnity

Question 54

For which category or categories of misrepresentation is contributory negligence available as a defence?

Answer 54

Negligent misrepresentation

Question 55

Is it possible for a representor to exclude or restrict their liability for misrepresentation?

Answer 55

Yes, as long as the clause satisfies the requirement of reasonableness as stated in s. 11(1) of the Unfair Contract Terms Act 1977

Question 56

A representation which is false is incorporated into a contract as a term gives rise to which potential claim/s?

Answer 56

Misrepresentation and breach of contract

Question 57

An accountancy firm provides negligent advice to a client. The advice induces the client to enter into a contract to purchase a business. The client suffers a significant loss as a consequence of entering into this contract. What claim/s may be brought against the accountancy firm by the client?

Answer 57

Negligent misstatement

Correct. The correct claim is negligent misstatement. There is no claim in negligent misrepresentation as the accountancy firm’s negligent advice did not induce the client to enter a loss making contract with them but with a third party. See s 2(1) MA 1967.

Question 58

A hotelier is selling his hotel. During pre-contractual discussions with the buyer the hotelier tells the buyer that the hotel has its own car park that is let out to a tenant. The buyer expresses a desire to terminate the tenancy and expand the hotel onto that land. The hotelier tells the buyer that the tenancy is on a contractual licence, terminable on a month’s notice. After the sale of the hotel is completed the buyer finds out that the car park is in fact occupied under a protected business tenancy pursuant to statute.

What advice would you give the buyer?

The hotelier’s statement about the contractual licence is an actionable misrepresentation.

The seller’s statement about the contractual license is advertising hyperbole.

The seller’s statement about the contractual licence maybe an actionable misrepresentation as a statement of opinion elevated to a statement of fact.

The hotelier’s statement about the contractual licence is not an actionable misrepresentation.

The hotelier’s statement about the contractual licence is a statement of opinion.

Answer 58

The hotelier’s statement about the contractual licence is an actionable misrepresentation.

Correct. All the elements of an actionable misrepresentation are present. It is neither a statement of opinion, intention nor ‘advertising hyperbole’.

Question 59

A caravan owner is selling his caravan. The caravan owner paints a stain stopping paint to cover up some damp in the bathroom. The buyer looks around the caravan but does not go into the bathroom. After the sale the buyer discovers the damp and wants to sue the caravan owner for misrepresentation.

Which one of the following statements best explains the legal position?

The caravan owner’s conduct in hiding the damp will not amount to an actionable misrepresentation as the buyer did not inspect the bathroom prior to contracting, consequently, it is likely to be an innocent misrepresentation.

The caravan owner’s conduct in hiding the damp will amount to an actionable misrepresentation by conduct. It is likely to be a fraudulent misrepresentation.

The caravan owner’s conduct in hiding the damp will amount to a fraudulent misrepresentation and consequently the court will disregard inducement.

The Caravan owner’s conduct in hiding the damp will not amount to an actionable misrepresentation as the buyer did not inspect the bathroom prior to contracting, consequently, she was not induced to enter into the contract by this conduct.

The caravan owner’s conduct in hiding the damp will amount to an actionable misrepresentation by conduct. It is likely to be a negligent misrepresentation.

Answer 59

The Caravan owner’s conduct in hiding the damp will not amount to an actionable misrepresentation as the buyer did not inspect the bathroom prior to contracting, consequently, she was not induced to enter into the contract by this conduct.

Correct. This answer sets out the issues of inducement in relation to this potential misrepresentation correctly. The other answers appear plausible but are incorrect. As the bathroom was not inspected there is no inducement and consequently no misrepresentation. Had the buyer inspected the statement this would be a fraudulent misrepresentation.

Question 60

A cake shop owner is selling her shop. She tells the buyer what profit the cake shop makes each month. After this and before the sale the cake shop’s monthly profit halves. The cake shop owner knows that the buyer has relied on her earlier statement and would want this new information, but she does not know whether she needs to tell him. The sale completes without the cake shop owner advising the buyer of the changed circumstances.

Which of the following most accurately applies the law of misrepresentation?

The cake shop owner will not be liable in misrepresentation as this is a commercial transaction and the buyer should have investigated the monthly takings himself.

The cake shop owner has not made an actionable misrepresentation as the only statement she made was true and there is no duty of disclosure.

The cake shop owner has made an actionable misrepresentation. This will be a fraudulent misrepresentation.

The cake shop owner has made an actionable misrepresentation. This will be an innocent misrepresentation.

The cake shop owner has made an actionable misrepresentation. This will be a negligent misrepresentation.

Answer 60

The cake shop owner has made an actionable misrepresentation. This will be a negligent misrepresentation.

Correct. This answer correctly identifies that an actionable misrepresentation has been made by the seller. This is a continuing representation (With v O’Flanagan). This will be a negligent misrepresentation as she will not be able to discharge the burden proof upon her under s 2(1) to show actual belief and reasonable grounds to believe that her statement is true at the time the contract was made (as the circumstances changed before the sale). The other answers seem plausible but they are not correct. Whilst there is no general duty of disclosure under English law, a continuing representation (With v O’Flanagan) is an exception to this principle. It cannot be said that this will be a fraudulent misrepresentation. Fraud must be proved in relation to the failure to disclose the change in circumstances. As the cake shop owner does not know she is obligated to share this information it will not be fraudulent. This is not an innocent misrepresentation as the seller will not be able to discharge the burden upon her under s 2(1) to prove her statement was not negligent. Even if a court were to consider that the buyer should have investigated the profit levels himself prior to sale, this will not prevent the statement from being actionable, it will only have an impact on the seller’s defence of contributory negligence.

Question 61

A hairdresser wishes to purchase a salon. She visits a salon which is advertised for sale and asks the seller about their future plans. The seller responds, ‘don’t worry I won’t open a rival business close by, I am planning to move out of the area.’ The hairdresser is reassured by this and purchases the salon. In fact, the seller was already in discussions to purchase a new salon two streets away. One month after the hairdresser’s purchase is completed the seller opens their rival business and the hairdresser loses the vast majority of her clients as a result. Which of the following most accurately applies the law of misrepresentation?

The seller’s statement about future plans is unlikely to be material and is unlikely to induce the contract.

The seller’s statement about future plans is unlikely to be actionable as it is a statement of intention and immaterial.

The seller’s statement about future plans is likely to be an actionable misrepresentation which would be categorised as fraudulent.

The seller’s statement about future plans is likely to be an actionable misrepresentation which is innocent.

The seller’s statement about future plans is unlikely to be actionable as it is a statement of intention.

Answer 61

The seller’s statement about future plans is likely to be an actionable misrepresentation which would be categorised as fraudulent.

Correct. All the requisite elements of a claim in misrepresentation are present (statements of intention are actionable in limited circumstances), and as this statement was a knowingly false statement of fact (Edgington) it seems likely that it would fulfil the definition of fraud - Derry v Peek – knowingly, without honest belief in truth of statement, or recklessly – ‘total disregard for the truth’.

Question 62

A representor makes a material fraudulent misrepresentation when selling her business to the representee. The representee carries out his own cursory investigation before buying the business. If the representee had carried out this investigation more thoroughly he would have discovered that the representor’s statement was false. When carrying out his own investigations the representee finds out further information about the business that he was not told by the representor. This new information influences the representee’s decision to purchase the business. A week later, the representee discovers that representor’s fraud. The representee wants to rescind the contract for misrepresentation.

Which of the following most accurately applies the law of misrepresentation?

The representee will be able to set aside the contract for misrepresentation but his damages will be reduced as a reasonable investigation would have revealed the representor’s statement to be untrue.

The representee will not be able to set the contract aside for misrepresentation as the week delay will act as a bar to rescission.

The representee will not be able to set aside the contract for misrepresentation as he will not be able to show he was induced by the representor as he made his own independent check.

The representee will be able to set aside the contract for misrepresentation unless the representor is able to show that her statement did not influence him.

The representee will not be able to set aside the contract for misrepresentation as a reasonable investigation would have revealed the representor’s statement to be untrue.

Answer 62

The representee will be able to set aside the contract for misrepresentation unless the representor is able to show that her statement did not influence him.

Correct. The representor has made a material representation. The representee will be able to set the contract aside unless the representor is able to show the statement did not influence the representee (Pan Atlantic v Pine Top). The other answers seem plausible, but they are not correct. If the representee does not rely on the representor because he exclusively relies on his own independent check then a claim in misrepresentation will fail. However, if the misrepresentation continues to play a real and substantial part (despite the independent check) then the claim can still succeed. A one week delay is unlikely to act as a bar to rescission. If the representee carries out a negligent check this will not impact on a claim or the remedy available for fraudulent misrepresentation. Note that damages may be reduced for contributory negligence if the misrepresentation was negligent (the statement in the scenario is fraudulent).

Question 63

A farm shop owner and is organising an apple festival on 2 August. On 1 June, a customer, who is interested in attending, goes to visit the shop to discuss purchasing a ticket. During the conversation, the shop owner tells the customer that she plans to make apple cupcakes for the festival attendees which will be covered in gold leaf (the “Statement”). However, on 20 June, the shop owner discovers that gold leaf is much more expensive than she had expected and decides to make plain apple cupcakes instead. On 13 July, the customer purchases a ticket to the festival. Which one of the following statements best reflects the legal position?

The Statement is not actionable because there is no duty to disclose a change in circumstances

The Statement is actionable as it amounts to a misrepresentation by conduct

The Statement is not actionable because it is a statement of future intention

The Statement is actionable as it is a continuing representation

The Statement is a mere puff

Answer 63

The Statement is not actionable because it is a statement of future intention

Question 64

A firm of travel agents, sell a holiday to a family. In the course of doing so, they represent that the villa at which the family will stay is (at the time of the representation) next to a leisure complex open to the public from 8am to 8pm each day. The travel agents had ascertained this to be the case during research when putting their holiday brochure together 3 months earlier. However, unbeknownst to the travel agents, the leisure complex had shut six days before the travel agents made this statement to the family, due to the unexpected insolvency of its owners. Which of the following statements is the best advice to give to the family?

The travel agents have made a fraudulent misrepresentation

The travel agents has made either a negligent or an innocent misrepresentation, depending on whether the research about the leisure complex 3 months earlier amounted to reasonable grounds to make the representation.

The travel agents have made an innocent misrepresentation

The travel agents have not made any misrepresentations

The travel agents have made a negligent misrepresentation

Answer 64

The travel agents has made either a negligent or an innocent misrepresentation, depending on whether the research about the leisure complex 3 months earlier amounted to reasonable grounds to make the representation.