Misrepresentation Flashcards
Misrepresentation definition
An actionable misrepresentation is an untrue statement of fact which induces a person to enter a contract.
Must be an untrue statement of fact and NOT:
-Opinion
-Forecasts/statements of intention
-Trading Puffery
-Statements of Law
-Silence or Non-disclosure
(which induces a person to enter a contract)
Bisset v Wilkinson (1927)
If an unsure statement is an uninformed opinion, it is not an untrue statement of fact.
Smith v Land & House Property Corp (1884)
The statement must not contradict other facts known by the party giving the opinion.
Esso Petroleum Ltd. v Mardon (1976)
It is more likely to be an opinion if the giver is not better informed than the receiver.
Edgington v Fitzmaurice (1885)
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.
Dimmock v Hallett (1866)
A statement of fact does not include exaggerated advertising or vague boasts.
Pankhania v Hackney London Borough Council (2002)
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.
‘Caveat Emptor’ meaning
Let the buyer beware.
Fletcher v Krell (1873)
There is no legal obligation to disclose a material fact known to them, to the other party.
R v Barnard (1837)
You can misrepresent by conduct, even if you stay silent.
Schneider v Heath (1813)
You can misrepresent by deliberately concealing defects, even if you stay silent.
Dimmock v Hallet (1866). - again
You can misrepresent by giving a half-truth.
Bannerman v White (1861)
If the untrue statement of fact induces someone into entering the contract, then it is misrepresentation.
Redgrave v Hurd (1881)
If the misrepresentation is not discovered because the opportunity to check it is declined, then the statement is still being relied upon.
Attwood v Small (1838)
If the misrepresentation is not discovered after a third party checks the facts, then the statement is not being relied upon.
Where there is more than one inducement
-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.
2 Remedies for misrepresentation
-Rescission
puts parties back to where they were
-Damages
compensate the injured party
Car & Universal Finance v Caldwell (1964)
You cannot rescind if it is impossible to do so.
3 Circumstances when the right to rescind may be lost?
-If you want to rescind you must stop using the goods/services
-Where restitution is impossible e.g consumed.
-Lapse of time
Long v Lloyd (1958)
An innocent party affirms the contract by indicating that they wish to continue and not rescind.
Leaf v International Galleries (1950)
Rescission may be lost if a sufficient period of time has passed.
Doyle v Olby (1969)
There is recovery of all direct loss from relying on the fraudulent misrepresentation regardless of foreseeability
Hedley Byrne v Heller (1964)
A false statement made with no reasonable grounds for believing it to be true is negligent mis-statement.
Esso Petroleum Ltd v Mardon (1976)
A false statement made with no reasonable grounds for believing it to be true is misrepresentation.
Negligent misstatement must have a ‘special relationship’ between parties.
What could this include:
-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.
Misrepresentation Act 1967
-Introduced negligent misrepresentation
-Enacts the category of wholly innocent misrepresentation
-Supercedes the common law remedy of fraudulent misrepresentation.
Two Main uses of Misrep Act
-Burden of proof is reversed (Defendant must prove that they had reasonable ground to believe the statement)
-Remedies are recession and/or damages.
Wholly innocent misrepresentation S2(2)
-‘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.
William Sandal Plc v Cambridgeshire CC (1994)
If there is innocent misrepresentation the contract is still voidable.
Exemption/Limitation Clauses - S3
For the misrepresentor to exclude liability for the mis- statement he must show the clause satisfies the test of reasonableness
