Misrepresentation Flashcards
What is a representation?
A statement asserting the truth of a given state of facts
What is a misrepresentation?
An unambiguous false statement of fact made to the claimant and which induces the claimant to enter into the contract with the statement maker
What is the effect of misrepresentation?
The contract is voidable
What is meant by the misrepresentation must be unambiguous?
The representation must be clear and unambiguously puts forward the meaning meant by the represent.
Will the representer be liable if the representee places their own unreasonable construction on the representation?
No
What is meant by the misrepresentation must be false?
It must be false.
If a statement is substantially correct, it will not be false
What is meant by the misrepresentation must be a statement of fact?
It must be a statement asserting a given state of affairs, not an undertaking to do or not to do something
Are salespeople allow any leeway when it comes to misrepresentation?
Yes - sellers have a good deal of latitude in choice of language where it is just advertising puff
Can conduct amount to a misrepresentation?
Yes
Can a statement of law give rise to an actionable misrepresentation?
Yes
What statements do not normally amount to a statement of fact for the law of misrepresentation?
Statements of opinions, statements of future intention and instances of silence
What is meant by the misrepresentation must be addressed to the claimant?
The misrepresentation must be addressed by the representer to the claimant
What is meant by the misrepresentation must induce the claimant to enter into the contract with the statement maker?
The representation must have caused the representer to enter into contract.
What will the court consider in deciding if the misrepresentation induced the claimant to enter into contract?
EITHER Option One
i) Representee shows that the statement would have influenced a reasonable person
AND
ii) Representor cannot show that the statement did not influence this particular representer
OR Option Two
Representee shows that it personally was induced by the statement (subjective test)
When will a representation that is false not be an actionable misrepresentation?
- the statement was not actually communicated to the representee
- the statement did not affect the representer’s decision to enter the contract
- the statement was known to be untrue by the representee
Does the misrepresentation need to be the only reason the claimant entered the contract?
No
Can a party bring a claim in misrepresentation when it has made its own investigations and relied on them and not the misrepresentation?
No
Do separate enquiries/investigations by the representee always meant they cannot bring a claim in misrepresentation?
No - will only prevent a claim where the representers statements were not relied upon as a result of the separate enquiries
When will a statement of opinion be a qualifying statement of fact in the law of misrepresentation?
If a representor is in a position of superior knowledge or experience, a statement of opinion by them may be held to involve a statement of fact that there are reasonable grounds for their opinion
OR
If in fact the opinion expressed is not one which the representor held
When will a statement of future intention be a qualifying statement of fact in the law of misrepresentation?
If the representor states that they do intend to do something, then they are making a limited statement of fact - they are stating they do have intention. If they know they cannot do what they state or do not intend to do it, they are misrepresenting their existing intention
What is the exception to the rule that silence is not a qualifying statement of fact in the law of misrepresentation in relation to half-truths?
Where a statement is technically true but misleading
What is the exception to the rule that silence is not a qualifying statement of fact in the law of misrepresentation in relation to continuing representations?
Obligation on representation to correct any representations during negotiations which are true initially but later become false - failure to do so will mean it is a qualifying misrepresentation
What is the exception to the rule that silence is not a qualifying statement of fact in the law of misrepresentation in relation to contracts of utmost good faith?
Contracts of utmost good faith like insurance require disclosure of certain material facts - silence will therefore amount to misrepresentation
What are the three categories of misrepresentation?
- Fraudulent
- negligent
- innocent
Why do the categorisation of misrepresentations matter?
It matters because the remedies available depends on the categorisation
What are the requirements for it to be a fraudulent representation?
Representee to prove that representor made statement knowing untrue/without belief in truth/ reckless as to the truth
What are the requirements for it to be a negligent representation?
Representor fails to show reasonable grounds to believe true and/or not believing true up until the contract was made
What are the requirements for it to be an innocent misrepresentation?
Representation has shown reasonable grounds to believe and actual belief up until the contract was made
What remedies are available in relation to fraudulent misrepresentation?
Rescission, indemnity (although unlikely to be granted if damages are give), damages (generous remoteness rules and no reduction for contributory negligence
What remedies are available in relation to negligent misrepresentation?
Rescission, indemnity (although unlikely to be granted if damages are give), damages (generous remoteness rules, potential reduction for contributory negligence. Can also be given in lieu of rescission.)
What remedies are available in relation to innocent misrepresentation?
Rescission, indemnity (as part of rescission, damages only in lieu of rescission
What is the situation is a misrepresentation is also deemed to be a term of the contract?
Then in addition to any misrepresentation claim may also be a claim for breach of contract
What is the overlap with the law of negligence here?
If there is a claim for misrepresentation may also be claim in tort for negligent misstatement
