Misrepresentation

Question 1

Misrepresentation definition

Answer 1

An actionable misrepresentation is an untrue statement of fact which induces a person to enter a contract.

Question 2

Must be an untrue statement of fact and NOT:

Answer 2

-Opinion
-Forecasts/statements of intention
-Trading Puffery
-Statements of Law
-Silence or Non-disclosure
(which induces a person to enter a contract)

Question 3

Bisset v Wilkinson (1927)

Answer 3

If an unsure statement is an uninformed opinion, it is not an untrue statement of fact.

Question 4

Smith v Land & House Property Corp (1884)

Answer 4

The statement must not contradict other facts known by the party giving the opinion.

Question 5

Esso Petroleum Ltd. v Mardon (1976)

Answer 5

It is more likely to be an opinion if the giver is not better informed than the receiver.

Question 6

Edgington v Fitzmaurice (1885)

Answer 6

A statement of future intention is not generally a statement of fact. Unless the person has no such intention to preform the action in the future.

Question 7

Dimmock v Hallett (1866)

Answer 7

A statement of fact does not include exaggerated advertising or vague boasts.

Question 8

Pankhania v Hackney London Borough Council (2002)

Answer 8

In theory no-one can be misled as to what the law is because everyone is presumed to know the law. However, if the law is misrepresented it is actionable.

Question 9

‘Caveat Emptor’ meaning

Answer 9

Let the buyer beware.

Question 10

Fletcher v Krell (1873)

Answer 10

There is no legal obligation to disclose a material fact known to them, to the other party.

Question 11

R v Barnard (1837)

Answer 11

You can misrepresent by conduct, even if you stay silent.

Question 12

Schneider v Heath (1813)

Answer 12

You can misrepresent by deliberately concealing defects, even if you stay silent.

Question 13

Dimmock v Hallet (1866). - again

Answer 13

You can misrepresent by giving a half-truth.

Question 14

Bannerman v White (1861)

Answer 14

If the untrue statement of fact induces someone into entering the contract, then it is misrepresentation.

Question 15

Redgrave v Hurd (1881)

Answer 15

If the misrepresentation is not discovered because the opportunity to check it is declined, then the statement is still being relied upon.

Question 16

Attwood v Small (1838)

Answer 16

If the misrepresentation is not discovered after a third party checks the facts, then the statement is not being relied upon.

Question 17

Where there is more than one inducement

Answer 17

-If the misrepresentation is one of several statements which induced the contract it is still actionable.

-Only one false one is needed if you have relied on the untrue statement to some extent.

Question 18

2 Remedies for misrepresentation

Answer 18

-Rescission
puts parties back to where they were

-Damages
compensate the injured party

Question 19

Car & Universal Finance v Caldwell (1964)

Answer 19

You cannot rescind if it is impossible to do so.

Question 20

3 Circumstances when the right to rescind may be lost?

Answer 20

-If you want to rescind you must stop using the goods/services
-Where restitution is impossible e.g consumed.
-Lapse of time

Question 21

Long v Lloyd (1958)

Answer 21

An innocent party affirms the contract by indicating that they wish to continue and not rescind.

Question 22

Leaf v International Galleries (1950)

Answer 22

Rescission may be lost if a sufficient period of time has passed.

Question 23

Doyle v Olby (1969)

Answer 23

There is recovery of all direct loss from relying on the fraudulent misrepresentation regardless of foreseeability

Question 24

Hedley Byrne v Heller (1964)

Answer 24

A false statement made with no reasonable grounds for believing it to be true is negligent mis-statement.

Question 25

Esso Petroleum Ltd v Mardon (1976)

Answer 25

A false statement made with no reasonable grounds for believing it to be true is misrepresentation.

Question 26

Negligent misstatement must have a ‘special relationship’ between parties.
What could this include:

Answer 26

-A reliance by the claimant on the defendant’s specialist skill and judgment;
-Reasonable expectation of knowledge on the part of the defendant, that the claimant would be relying on that statement;
-Reasonability for the claimant to rely on the defendant;
-That there is an assumption, either explicit or implicit, of responsibility on behalf of the defendant.

Question 27

Misrepresentation Act 1967

Answer 27

-Introduced negligent misrepresentation
-Enacts the category of wholly innocent misrepresentation
-Supercedes the common law remedy of fraudulent misrepresentation.

Question 28

Two Main uses of Misrep Act

Answer 28

-Burden of proof is reversed (Defendant must prove that they had reasonable ground to believe the statement)
-Remedies are recession and/or damages.

Question 29

Wholly innocent misrepresentation S2(2)

Answer 29

-‘False statement made by a person who at the time had reasonable grounds for believing it to be true’
-Courts have the discretion to award damages in lieu of rescission.

Question 30

William Sandal Plc v Cambridgeshire CC (1994)

Answer 30

If there is innocent misrepresentation the contract is still voidable.

Question 31

Exemption/Limitation Clauses - S3

Answer 31

For the misrepresentor to exclude liability for the mis- statement he must show the clause satisfies the test of reasonableness