Misrepresentation Flashcards
What is a vitiating factor?
Something that makes a contract void or voidable- it affects the validity of a contract.
What is a voidable contract?
The contract is valid but the innocent party can declare the contract invalid and not legally binding. Misrepresentation is an example of this.
What is misrepresentation?
A false statement of fact made by a party in the contract that induces the other party to enter the contract.
What are the key elements of misrepresentation?
-Makes a false/untrue statement
-Statement is of fact
-Made by a party to the contract to the other party
-The statement induced the other party to enter into the contract
What is a false or misleading statement?
Spice Girls v Aprilia World Service- making a statement should be interpreted broadly to include written and verbal statements, pictures, advertising, packaging and even conduct.
What is the general rule for silence or non disclosure?
Fletcher v Krell- usually, silence or non disclosure is not a false statement.
What are the exceptions to the general rule for silence or non disclosure?
-Confidential relationship
-Making a Half true statement
-Circumstances changing after the statement was made
-Consumer rights
What is the rule of confidential relationships?
If a contract that involves high level of honesty between 2 parties, non-disclosure of info will be a misrepresentation
What is the rule about silence or non disclosure for making a half true statement?
Dimmock v Hallett- making statements that are technically true but fail to reveal the full situation can be misrepresentations.
What is the rule about silence or non disclosure for circumstances changing after a statement was made?
With v O’Flanaghan- there is a legal obligation to tell the buyer of the change in circumstances if the new situation makes the previous statement false.
What is the rule about silence or non disclosure for consumer rights?
If a business leaves out or hides any important information that helps a consumer make an informed choice, this can be a misrepresentation.
In which situations will the statement not be of fact?
-Statements of opinion
-Statements of future intention or conduct
-Puff or mere sales talk
What is the general rule for statements of opinion?
Bisset v Wilkinson- statements of opinion will not amount to statements of fact and therefore they are not actionable.
When can statements of opinion be a misrepresentation?
Smith v Land and House Property Corp- if the opinion is given by a person with special knowledge or skill, this can amount to a misrepresentation.
What is the general rule for statements of future intention or conduct?
A statement that expresses future intention is speculation rather than fact.
When can statements of future intention or conduct be a misrepresentation?
Edgington v Fitzmaurice- if the person making the statement definitely did not have that intention at the time, this can amount to a statement of fact.
What is puff or mere sales talk?
These are empty boats rather than factual statements. The test is whether the statement would make a reasonable person enter a contract.