Misrepresentation Flashcards
What is misrepresentation
a vitiating factor that makes a contract voidable.
Define a false statement
A statement of material fact made by one party to induce another party into the contract
When can a false statement be legitimate
When it is written, verbal or anything that influences the others decision
What case can be used to give an example of false statement
Spice Girls LTD v Aprilla World Service
Can silence amount to misrepresentation
No, it does not usually amount to misrepresentation
When can silence amount to misrep
- Initially true statement
- Half truth
- Relationship is based on trust
- Made in the utmost good faith
What must the statement be
Pure fact, rather than opinion or intent
What must the statement do
Induce the other party to enter the contract & be a critical part of making the decision
When will it not induce a party
- When the person entering is not a part of the misrep
- if the person relies on information they have obtained from elsewhere
What does the extent of a persons knowledge depend upon
The accuracy of the statement which defines what type of misrep it is
What are the 3 types of misrep
Fraudulent, Negligent and innocent.
What is fraudulent misrep
Any statement which contains a deliberate untruth, which is made without belief in its truth, or recklessly.
What is negligent misrep
Any representation is negligent unless the maker has reasonable grounds for believing its truth at the time and all subsequent moments up until the contract
What is innocent representation
Any representation that is not fraudulent or negligent and is made honestly and reasonably.
What are the rights and remedies
Any victim has the right to rescind the contract, meaning both parties return to their pre-contract positions. It is an equitable remedy.
