Misrepresentation

Question 1

What is a representation?

Answer 1

A representation is a statement asserting the truth of a given facts. A false one can give rise to misrepresentation

Question 2

What is an actionable misrepresentation?

Answer 2

An unambiguous false statement of fact made to claimant and which induces the claimant to enter into the contract with the statement maker

1. Unambiguous - must be clear and put forward by representee
2. False
3. Conduct, statement of law, statement of expert opinion. EXCEPTIONS - STATEMENT OF OPINION AND FURTURE INTENTENION AND SILENCE IS NOT.
4. Addressed to claimant
5. Induced the claimant to enter into it - TEST IS - Objective test - induced a reasonable person. AND representor cannot show that the statement did not influence this particular representee

IF statement is material - the inducment is inferred as a matter of fact
IF NOT MATERIAL - up to claimant to show that they were subjectively induced - - If own investigation - It does not need to be the only reason they entered into the contract.

Question 3

What is a statement of fact compared to opinon?

Answer 3

If representor is considered to have greater knowledge, then the implied statement that there are facts which justify the opinion may mislead

• Stating something about future intention needs to be true at time it made.
• Continuing representations – if at beginning of negotiations something is true but becomes false before they enter into a contract then representor is under an obligation to correct the representations.
• Contracts utmost good faith – where one party is in a strong position to know material facts – duty to disclose

Question 4

Fraudulent misrepresentation?

Answer 4

• Fraud occurs where a false representation is knowing or without belief in its truth made, or recklessly.
• Court will need to be satisfied that it was deliberate or dishonestly
• Burden of proof on claimant. Representee to prove representor made statement KNOWING untrue, without belief in truth/ reckless to truth

Remdies
- Recission
- Damages – generous – NO REQUIREEMNT OF FORSEEABILITY remoteness rules, no reduction for contributory negligence

Question 5

What is negligent misrepresentation?

Answer 5

Negligent misrepresentation
- Defendant will be liable unless they can prove that they did believe or had reason to believe the statement was true.
- If found to be negligent misrepresentation then treated as fraudulent misrepresentation
- Defendant will need to show they actually believed it to be true AND had reasonable ground to believe it

Remedies
- Recission
- As for fraud – but potential reduction for contributory negligence
- Same damages as fraudulent

Question 6

Innocent misrepresentation?

Answer 6

• Proves they had reasonable grounds for belief in truth of statement
• Actually, belief up to time contract was made

Remedies
- Recission
- Indemnity as part of recission
- Damages can be given in lie of recission

Question 7

What is recission?

Answer 7

• Misrepresentation renders a contract voidable but not void.
• Recission is available – in order to do so representee must communicate intention to do so to representor.
• Entirely at discretion of court. Only when they CAN be restored to pre contract positions.

Question 8

What are the bars to recission?

Answer 8

• Affirmation
• Lapse of time
• Restitution is impossible
• Third part rights accrue