Misrepresentation

Question 1

Voidable vs Void

Answer 1

Voidable: party can elect to rescind the contract
- subject to economic duress, undue influence, misrepresentation and mistakes
Void: parties treated as if they never made a contract
- subject to mistakes and illegality

Question 2

Rescission vs Damages

Answer 2

Rescission: setting aside contract and restoring the parties to their pre-contractual position
- rewinds parties
Damages: puts the party back into the position they would have been in had the misrepresentation never been made
- fast forwarding

Question 3

Remedies for the types of Misrepresentation

Answer 3

1. Fraudulent Misrep
   - recession and damages based on the tort of deceit
2. Negligent Misrep (Common Law)
   - recission plus damages based on the tort of negligent misstatement
3. Negligent Misrep (Statute)
   - recission plus damages on the Misrepresentation Act 1967
4. Innocent Misrep
   - strictly recission only BUT section 2(2) Misrep Act 1967

Question 4

Tortious damages vs Contractual Damages

Answer 4

Tortious:
- based on reliance loss
- putting the claimant back into the position they would’ve been in if the misrep hadn’t happened
Contractual
- based on expectation loss
- fast forwarding the parties into the position they would have been if the breach not occurred

Question 5

The point of Misrep Act s2(2)

Answer 5

• to give court power to award damages as an alternative to an order for rescission

Question 6

Fraudulent Misrepresentation Summary

Answer 6

What it is:
its the lack of belief in truth of what was said (Derry v Peek)
Burden of Proof
- burden of proof is on the representee (difficult to discharge in practice)
How Damages are Calculated
- based on the tort of deceit
- reliance lost
- not limited in terms of remoteness and foreseeability
- representee can claim for lost opportunities

Question 7

Negligent Misrepresentation (Common Law) Summary

Answer 7

What is it?
- Representor believed in the truth of the statement, but they were negligent in formong that belief
Burden of Proof?
- on the representee to prove that the representation was made negligently and that the representor owed them a duty of care
How Damages are Calculated
- based on the tort of negligent mistatement
- normal rules of foreseeability and remoteness apply

Question 8

Negligent Misrep (Statute) Summary

Answer 8

What does the claimant need to show?
- that there was a flase statement which induced them to enter in the contract and they suffered loss as a result
Who has the burden of proof?
- the misrepresentor must prove they had reasonable grounds to believe the truth of what was said
How are damages calculated?
- fiction of fraud
- based on the tort of deceit
- reliance lost
- not limited in terms of remoteness and foreseeability
- representee can claim for opportunity lost