misrepresentation

Question 1

what is a misrepresentation?

Question 2

what are the four elements to consider for misrepresentation

Answer 2

• A false statement
• Material fact
• Made by a party to the contract
• Induces the other party to enter the contract

Question 3

False statement

misrep - element 1

Answer 3

statement made must be false, meaning it is not true or accurate.

as there must be a statement to be a misrepresentation, silence cannot be a misrepresentation - Fletcher v Krell (1873)

Question 4

Fletcher v Krell (1873)

Answer 4

The court decided that there was no misrepresentation as she was under no duty to disclose her marital status and she had not been asked about it.

silence is not a misrep - element 1 false statement

Question 5

exceptions to ‘silence cannot be a misrep’

Answer 5

• once a statement has been made, even if it is true when made, it can become a misrepresentation if it becomes false before the contract is made
• silence can be a misrepresentation where a statement made is a half-truth.
• where the relationship between parties is based on trust, then silence may be a misrepresentation
• where a contract is a contract of ‘utmost good faith’ then all material facts must be disclosed whether asked about or not.
• The statement does not have to be written or verbal. It could also be anything that would influence the other’s decision

Question 6

With v O’Flanagan (1936)

Answer 6

• A doctor accurately stated the profits of his medical practice made with a view to inducing purchasers to buy the practice.
• However, between the statement and the contract being made, the doctor fell ill and many of the patients left the practice. This made the original statement inaccurate.
• the court decided he had to tell the purchaser of the changed situation

If info changes u must correct this before acceptance otherwise = misrep

Question 7

Dimmock v Hallett (1866)

Answer 7

• A seller of land told the purchaser truthfully that there were tenants on the land. This was exactly what the purchaser wanted.
• However, he did not complete the statement by telling the purchaser that all the tenants were leaving.
• The court decided that this part-truth was a misrepresentation.

silence can be a misrep where a statement made is a half-truth.

Question 8

Tate v Williamson (1866)

Answer 8

• A financial adviser advised his client to sell some land for less than half its value so that his client could clear his debts.
• The adviser then purchased the land himself but did not tell his client that he had done so.
• The court decided that the adviser’s failure to disclose that he was intending to buy the land personally was a breach of trust and was therefore a misrepresentation

where relationship betw parties is based on trust, silence may be misrep

Question 9

Lambert v Co-operative Insurance Society (1975)

Answer 9

• A woman renewed her jewellery insurance policy. She did not tell the insurance company that her husband had recently been convicted of conspiracy to steal. This was an important fact which would have affected the insurance company’s decision whether to renew the insurance, and if so, at what premium.
• Her silence about the conviction was a misrepresentation. The company was entitled to void the policy and refuse to pay any claims.

contract of ‘utmost good faith’ = all material facts must be disclosed w

Question 10

Consumer Insurance (Disclosure and Representations) Act (2012)

Answer 10

There is now clearer guidance as to what must be disclosed and how
insurance companies remind their customers of this. This can be found in
the Consumer Insurance (Disclosure and Representations) Act (2012)

Question 11

Spice Girls Ltd v Aprilia World Service BV (2000)

Answer 11

The court decided that by all of them attending, the group represented that none of them intended to leave the group and none of them were aware that one member intended to. This was a misrepresentation

doesn’t have to be written/verbal. could be anything that influences oth

Question 12

Material Fact

element 2 - misrep

Answer 12

• misrep must be of a material fact
• means that it would have led a reasonable person to make the contract and did in fact influence the mind of the person making the contract
• must be a statement of fact rather than a statement of opinion

Question 13

Bisset v Wilkinson (1927)

Answer 13

• the seller of farmland that had never had sheep on it was asked by the buyer how many sheep it could take
• although not a sheep farmer, he stated that he thought it would support about 2000
• this turned out to be false.
• however as he genuinely believed his opinion to be accurate, it was not a misrepresentation

element 2 - misrep

Question 14

Made by a party to the contract

element 3 - misrep

Answer 14

means that a person is not liable for statements made by others unless
they are their agent

Question 15

Induces the other party to enter the contract

element 4 - misrep

Answer 15

• means that the statement must lead the other party into making the contract, and must be a critical part of making the decision.
• statement must be important to the person making the contract and they must have relied on the statement made rather than their own judgement or information they obtained elsewhere for there to be a misrepresentation

Attwood v Small (1838), Redgrave v Hurd (1881), Museprime v Adhill

Question 16

Attwood v Small (1838)

Answer 16

• seller of a mine made a false statement to the purchaser about the earnings from a mine
• buyer instructed a surveyor to confirm this statement, which he did (incorrectly).
• purchaser bought the mine and then discovered the statement to be untrue.
• held: no misrepresentation as the purchaser relied on the survey report and not the seller’s statement (as he did not just believe him)

Question 17

Redgrave v Hurd (1881)

It does not matter if the victim could have discovered the truth by taking reasonable steps or it was unreasonable to rely on the untrue statement

The fact that the untrue statement was relied upon is enough to make it amount to a misrepresentation

Answer 17

• The purchaser of a solicitor’s 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 did not look at the accounts. Had he done so, he would have seen that the seller’s statement was false.
• He was entitled to rely on the seller’s statement which as it was untrue was a misrepresentation!