Misrepresentation Flashcards
Introduction
Definition - untrue statement of material fact which induces another party to enter a contract. Can make a contract void
Misrepresentation act 1967
1st paragraph - reinforce duty not to lie in a contract
Couchman v Hill - statements cannot be blatantly untrue, would mislead a party
Attwood v Small - must be the cause of a breach
Edington - not an opinion
Bisset v Wilkinson - honest opinion not a fact
However easy to misunderstand legislation BUT provides consistency and protects buyers/sellers
2nd paragraph- misrepresentation before a contract is ‘fair’
Roscorla v Thomas - horse free from vice, unclear representation, CRUCIAL as info before a contract cannot be reason for breach (unless severely specific)
Parole rule - extrinsic evidence before or at the time cannot be used in litigation to modify/contradict a written contract
USEFUL as further supports the act. BUT half truths are an issue (outcome by undemocratic judges)
SILENCE - not misrepresentation in act even though it’s morally reprehensible
3rd paragraph - three types of misrepresentation
Innocent, fraudulent, negligent
Innocent = you can’t prove its fraudulent or negligent , if statement has honest belief in truth
Fraudulent = one party makes a false statement Derry v peake
Negligent = Hedley v Byrne
Distinction is more equitable since theres variation in the act
HOWEVER - depends on definitions for case law and outcomes are subject to judges. It is not LINEAR.
Hedley Byrne
Negligent misrep
Damages are recovered where there is a special relationship
3 requirements:
1. A party making making statement is in possession of knowledge for which advice is required
2. Sufficient proximity to rely on statement
3. The other party is aware of the reliance
Derry v peake
Defined fraudulent misrepresentation
They intentionally lied.
Roscorla v Thomas
Misrepresentation has to occur during the formation of the contract and cannot be after the contract has been completed
Half truth
Deceives the recipient by presenting something believable and using those aspects of a statement that can be shown to be a good reason to believe the statement is true to its entirety
Attwood v small
Require a main reason/inducement for contract
Acted as an inducement as he used his own experts so didn’t rely on information
Bisset v Wilkinson
Must be a statement of material fact
Land could hold 2000 sheep
Honest opinion not a material fact
Para 4- the act clarifies the law and displays remedies
Howard marine v Ogden
Spice girls Ltd v Aprilia world service
Remedies
Link to consumer law - confusing/unclear for citizens. Hard to judge whether good or not
Could be made to pay for damages and could be considered unfair as negligent misrep could be accidental
Howard marine v Ogden
Defendant claimed breach for collateral warranty in the representations between parties before the agreement had been reached
Although misrep was minor, court allowed appeal under s2 of act.
Spice girls Ltd v Aprilia world
Act used to find SPL liable/pay damages for misrep (effective act)
Two remedies
Rescission/damages
What damages for fraudulent and negligent misrepresentation?
Under tort of deceit/negligence and under s2 (1) misrepresentation act where rescission is also available
