Misrepresentation

Question 1

Introduction?

Answer 1

Misrepresentation act 1967 - A misrepresentation only occurs in the formation of a contract. Representations are statements that influence the formation of contracts. When these statements are false we have misrepresentations and the person suffering these can take action to end the contract (void).

Question 2

Definition?

Answer 2

A false statement of material fact made by a party to the contract that induces the other party to enter the contract.

Question 3

a) False Statement: Definition?

Answer 3

The statement must be false, meaning that it’s not true or accurate.

Question 4

a) False Statement: Obligation to say something?

Answer 4

Fletcher v Krell - There is not obligation to say anything but whatever is said must be true.

Question 5

a) False Statement: True to Untrue?

Answer 5

With v O’Flanagan - A true statement which becomes untrue is a misrepresentation.

Question 6

a) False Statement: Trust?

Answer 6

Tate v Williamson - Where the contract is based on trust then silence may be a misrepresentation.

Question 7

a) False Statement: Action?

Answer 7

Spice Girls v Aprilia - The misrepresentation can be through an action.

Question 8

B) Material Fact?

Answer 8

It must be a statement of fact rather than a statement of opinion.

Bisset v Wilkinson - Future intentions are not facts.
Edgington v Fitzmaurice - Unless it can be shown that they would be lies.

Question 9

C) Made by a party to the contract?

Answer 9

Person not liable for statements made by others unless they are acting as their agents.

Question 10

D) Induces the other party to enter the contract?

Answer 10

Avon Insurance v Swire Fraser Ltd - The false statement must have been relied upon by the other party.

Question 11

1) Innocent Misrepresentation: Definition?

Answer 11

Misrepresentation Act 1967 - Maker of the statement having reasonable grounds and genuine belief in the truth of the statement. Claimant can have one remedy or the other not both.

Question 12

1) Innocent Misrepresentation: Recission?

Answer 12

This is an equitable remedy awarded at the courts discretion, it puts parties in the position they were in before the contract.

Will Not happen in following circumstances:
Clarke v Dickson - Recission to the original position is impossible.
Long v Lloyd - The Contract is affirmed, the innocent party carries on with the contract.
Leaf v International Galleries - Delay, a delay between the misrepresentation and the complaint.
Lewis v Avery - A third party has gained rights over the property.

Question 13

1) Innocent Misrepresentation: Damages?

Answer 13

No automatic right to damages. S2(2) of the act gives courts discretion.

Question 14

2) Negligent Misrepresentation: Definition?

Answer 14

Hedley v Heller - There has to be a special relationship between the parties, The party should have checked the statement but didn’t.

Question 15

2) Negligent Misrepresentation: Remedies?

Answer 15

Same as innocent but defendant can have both.

Question 16

3) Fraudulent Misrepresentation: Definition?

Answer 16

Derry v Peek - Stated that fraudulent misrepresentation is when there is a statement which the person making knows to be untrue or is reckless as to whether or not it is true.

Question 17

3) Fraudulent Misrepresentation: Remedies?

Answer 17

Same rules as the other two.

Question 18

Traders to Consumers: Misleading Ommission?

Answer 18

Consumer Protection Regulations 2014 - A trader must not make a misleading omission to the buyer.

Question 19

Traders to Consumers: Samples?

Answer 19

Consumer Rights Act 2015 S13(2)(a) - Where the goods are sold by sample, the goods must match the sample except where the consumer is told about the difference.

S19 Remedies - The buyer has the right to reject the goods in the short term or to ask for them to replaced by goods which match the sample.

Question 20

Traders to Consumers: Unfair Commercial Practices?

Answer 20

Consumer Protection Unfair Trading Regulations 2008 - It is a criminal offence to mislead a customer with unfair commercial practices e.g. Fraudulent misrepresenation.

Question 21

Consumers to Traders?

Answer 21

Consumer Insurance Act 2012 - Insurance Company rights, Any deliberate non disclosure allows and insurance company to void a policy. If a false statement is careless the insurance company can reduce the amount of damages paid out.

Schedule 1 of the Act - The Party had to be aware that they had to disclose the information and/or the insurance company needed to ask for this information.