Misrepresentation Flashcards

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1
Q

What is misrepresentation?

A

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

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2
Q

What are the three types of misrepresentation?

A

Fraudulent, Negligent, Innocent

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3
Q

What are the 4 key elements of misrepresentation? There must be:

A

-A false/untrue statement
-Untrue statement of material fact
-Made by a party to the contract
-Induces the other party to enter into the contract

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4
Q

What is a false/untrue statement?

A

A statement made that must be false/untrue

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5
Q

What case shows that mere silence doesn’t usually amount to misrepresentation? Briefly explain the case

A

Fletcher v Krell - a woman applied for a job and didn’t mention that she was divorced because she wasn’t asked

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6
Q

In what case can silence amount to a misrepresentation and why did it amount to misrepresentation?

A

Tate v Williamson - the relationship between the parties was based on trust

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7
Q

What happened in the case of Tate v Williamson?

A

The financial advisor asked his client to sell some land for half its value to enable the client to clear his debts. The advisor then bought the land himself, but didn’t tell the client.

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8
Q

What is subsequent falsity and what case is an example of it?

A

If a true statement becomes false before the contract is made, then it is misrepresentation. The party who made the statement is obliged to correct the info before the contract is made - With v O’Flanagan

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9
Q

What happened in the case of With v O’Flanagan?

A

A Dr accurately stated the profits of his practice with a view to induce purchasers to buy it. Between the statement being made and the contract being made the Dr fell ill and many patients left - this made the original statement inaccurate and false

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10
Q

What is partial revelation/ half truths and what case covers this?

A

What isn’t said is a non-disclosure and may be a representation as the statement maker has a duty to reveal the whole truth - Dimmock v Hallett

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11
Q

What happened in the case of Dimmock v Hallett

A

A seller of land told the purchaser truthfully that there were tenants on the land which is what the purchaser wanted. However, the seller didn’t say that the tenants were all leaving

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12
Q

Why was Spice GirlsLtd v Aprilla World Service held to be a half-truth?

A

They signed a sponsorship agreement with Aprilla. Whilst the agreement was being negotiated Geri Halliwell decided to leave the SG but this was not communicated to Aprilla. Promotional material was filmed with all of the girls but when Geri left it meant that these were now worthless for promotional purposes. By all of the Spice Girls attending the filming etc. the court decided that the group were representing that non of them intended to leave and none of them were aware that one member intended to. This was misrepresentation by conduct

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13
Q

What is a contract requiring utmost good faith? What case is an example of this?

A

Where a contract is a contract of ‘utmost good faith’ then all material fact must be disclosed whether asked about or not - Lambert v Co-Op Insurance Society

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14
Q

What happened in the Lambert v Co-Op Insurance Society?

A

A woman renewed her jewellery insurance policy but didn’t tell the company her husband had recently been convicted of conspiracy to steal. This was an important fact which would have affected the decision by the insurers on whether to renew, and is so, at what premium.

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15
Q

What is a statement of material fact?

A

The statement must be a fact, merely stating an opinion will not create an actionable misrepresentation

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16
Q

What happened in Bisset v Wilkinson? Was there misrepresentation?

A

A seller of farm land, who had never farmed sheep on it was asked by the buyer how many sheep would fit on the land. The seller stated that he thought it would support about 2,000 sheep. This turned out to be false but because he genuinely believed his opinion to be accurate, it wasn’t a misrepresentation

17
Q

What happened in Smith v Land and House Properties Corp?

A

Claimants said that Mr Fleck was a ‘desirable tenant’ but they knew he wasn’t as he hadn’t paid his rent, therefore it wasn’t their honest opinion it was a representation that was false

18
Q

What happened in Edgington v Fitzmaurice?

A

IDK GIRL. next question.

19
Q

What element of misrepresentation does ‘A person isn’t liable for statements made by others unless they are their agent’ define?

A

Made by a party to the contract

20
Q

What element of misrepresentation does ‘ Statement must lead the other party into making the contract and must be a critical part of making the decision’ define?

A

Induces the other party to enter the contract

21
Q

Was Attwood v Small held as misrepresentation or not? and why?

A

The buyer relied on the statement of the surveyor not the seller therefore it wasn’t a misrepresentation

22
Q

What happened in the case of Attwood v Small?

A

The seller of a mine made a false statement to the purchaser about the earnings from a mine. The buyer instructed a surveyor to confirm this statement, which he did (incorrectly). The purchaser bought the mine and then discovered the statement to be untrue

23
Q

If the untrue statement was relied upon it’s enough to amount to misrepresentation; it doesn’t matter if the claimant could have discovered the truth by taking reasonable steps. What case demonstrates this?

A

Redgrave v Hurd

24
Q

What happened in Redgrave v Hurd?

A

The purchaser of a solicitors practice was given a set of accounts to look at. The seller verbally misled the purchaser as to the true earnings. He relied on the statement and didn’t look at the accounts. Had he done so, he would have seen that the sellers statement was false

25
Q

What the reasonable person would or wouldn’t have done is irrelevant. What case demonstrates this?

A

Museprime Properties v Adhill Properties

26
Q

What happened in the case of Museprime Properties v Adhill Properties?

A

The purchaser of property relied on inaccurate statements about rents made in auction particulars. The defendant argued that the ‘reasonable’ purchaser wouldn’t have relied on these statements and would have made other enquires. However, as the purchaser relied on the statement, there was reliance and there could be a misrepresentation

27
Q

What does s.12 Consumer Rights Act 2015 state?

A

-Traders have to provide certain information to the consumer before the contract becomes binding
-A change to any of this information made before entering the contract, or later, isn’t effective unless expressly agreed between the consumer and the trader

28
Q

What is fraudulent misrepresentation? What two cases show this?

A

When the statement is made knowingly that it is untrue or reckless whether or not it is true
-Derry v Reek
-Greenridge Luton One Ltd v Kempton investments Ltd

29
Q

What are the remedies for fraudulent misrepresentation?

A

To sue for damages under the tort measure and/or seek recission to the contract in equity

30
Q

What is negligent misrepresentation? What case is an example of this?

A

A false statement made by a person who had no reasonable grounds for believing it to be true although it isn’t a deliberate lie - Howard Marine v Ogden & Sons

31
Q

What are the two types of negligent misrepresentation?

A

-Negligent misrepresentation at common law, Recoverable under the tort of negligent misstatment
-Under the Misrepresentation Act 1967

32
Q

What does S.2(1) of the Misrepresentation Act 1967 state?

A

No special relationship is required between the two parties, all that is needed is for there to be a misrepresentation which results in a contract and the victim suffers loss

33
Q

What are the remedies for negligent misrepresentation?

A

Both types of negligent misrepresentation are recession and/or damages

34
Q

What is innocent misrepresentation?

A

A misrepresentation which is genuinely held on reasonable grounds. This is a false statement made honestly with the party always believing the statement to be true

35
Q

What are the remedies for innocent misrepresentation? What Act are they set out in?

A

They are set out under S.2(2) of the Misrepresentation Act 1967 - Recission OR damages in lieu of recession

36
Q

What is recession?

A

A drastic remedy as it brings the whole contract to an end.

37
Q

Under what 4 circumstances will the wronged party lose the right to recission?

A

-The innocent party affirms the contract
-There is a lapse of time
-The parties can’t go back in their original, pre-contractual position
-Recission would deprive an innocent third party of rights acquired over the property which is the subject of the contract