Misrepresentation Flashcards
what is a representation?
statement asserting the truth of a given state of facts.
def of 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.
makes a contract voidable.
unambiguous meaning>
must be clear and must have reasonable construction on the representation.
difference between a misrep and mere puff?
statement asserting a given state of affairs vs advertising language.
- can be made by conduct.
- statements of future intention are not actionable.
- opinions are not actionable.
- instances of silence are not actionable.
induces into the contract- was the representation material?
- did the statement relate to an issue that would have influenced a reasonable person?
a- if mateiral, burden shifts to the D.
b- if not material, c must claim subjective inducement.
does the misrep need to be the only reason the claimant entered into the contract?
NO.
misrep and making own investigations?
cannot make a claim if relied on own investigations.
when does a statement of opinion become a statement of fact?
if the representor is in a position of superior knowledge or experience and lack reasonable grounds for their opinion. (opinion is one which someone with that knowledge could not have reasonably held)
when does a statmeent of future intention become a statement of fact?
statements of intention with no such intention.
exceptions to silence?
when statement made at first which is true but then become untrue, representor is under an obligation to correct the intention.
what is a half truth?
technically true but misleading.
what is fraudulent misrep?
misrep made knowingly, without belief in its truth, recklessly (careless whether true or false).
what is negligent misrep>
D will be liable unless they can prove they had reasonable grounds to beleive up to the time the contract was made, the statement was true.
what is innocent misrep?
not fraudulent or negligent.
Test in terms of knowledge of representor: Representor has shown reasonable grounds to believe and actual belief up until the contract was made
what are the potential remedies for misrep?
- rescission.
- indemnity- to cover expenses for obligations assumed as a direct result of the contract.
- damages- greatest when fraudulent- tortious basis.
= put the claimant in the position they would have been in had the misrep not taken place.
- duty to mitigate once misrep has been discovered.
for innocent:
- rescission and an indemndity to cover the cost of legal obligations.
- no automatic right to damages.
what is the effect of contracts of utmost good faith e.g insurance contracts?
impose a duty on the insured to disclose all material facts that could affect the insurer’s decision to cover the risk,
