Misrepresentation Flashcards
What is representation?
Statement of fact that induced on party to enter the contract
When does it occur?
During the formation of a contract , usually during the offer /negotiation stage
Elements for misrepresentation
A false statement
Of material fact
Made by the party to the contract
That induces the other party to enter the contract
What’s a false statement ?
The statement is usually written or verbal, but it could be anything that could influence the other persons decision e.g conduct
The statement must be false
The extent of the knowledge on the statement will define what type of misrepresentation it will be
The false statement cannot be silence - silence is not a misrepresentation
Fletcher v Krell
A women applied for a job of governess. She did not disclose that she was divorced and was not asked if she was. In Victorian times , she wouldn’t have gotten the job if she was divorced . Held : not to be a misrepresentation because she was under no duty to disclose this and was not asked about it.
Case authority for false statement
Spice girls v aprilia world service Bv:
Spice girls signed a sponsorship with Aprilia. While the agreement was being negotiated, Geri Halliwell had given notice to leave the group. Aprilia were unaware of this . When they filmed promotional videos, all girls were present but when Geri left it made all the films worthless. Held : the court said all of them showing up in the videos, they represented that none of them intended to leave. This was a misrepresentation
What are silence exception?
Change of circumstance
The making of a half truth
Confidential relationships
What is meant by change of circumstance?
The statement may be true when it is made, but it can become misrepresentation if it becomes false before the contract is made.
With v o’flanagan
A doctor accurately stated the profits of his medical practice with a view to inducing the purchasers to buy the practice. Between the statement and the contract being made , the doctor fell ill and many. Of the patients left the practice. This made the original statement false . Court held that it was a misrepresentation as he had to tell the purchaser of the change of circumstance.
Half truth
If a statement is made is half truth and the rest is kept silent this can be misrepresentation
What is Kept silent is a non disclosure and there is a duty to reveal the whole truth of the situation
Dimmock v Hallett 1866
A seller of land told the purchaser truthfully that there were tenants on the land this is what the purchaser wanted. However, he did not complete the statement by telling the purchaser that all tenants were leaving. Held this is half truth and is misrepresentation
Confidential relationships
If the relationship is based on trust, then silence may be misrepresentation
E.g doctor and patient, solicitor and client
Tate v Williamson 1866
Financial advisor advised his client to sell some land for less than half the value. The advisor then purchased the land himself but didn’t tell his client. Held the advisor failure to disclose that he was intending to buy the land was personally a breach of trust and therefore a misrepresentation.
This is the same if the contract. Is one of utmost faith then all details must be disclosed whether they asked for or not. Mostly seen in insurance
Material fact
This means that it would led the persons to make the contract and did in fact influence the mind of the person making the decision.
Must be statement of fact not opinions
Could be a statement of future intention, if they do not intend to act out their intention then will be misrepresentation
Statements of opinion
If the maker of the statement genuinely believes the opinion they are stating then it will not be misrepresentation
If the opinion was not honestly held it will be regarded as material fact and not an opinion.
Bisset v Wilkinson
the seller of farmland that had never had sheep on it was asked by the buyer how many sheep it could take. although not a sheep farmer he stated that he thought it would be around 2000. This was false. However he genuinely believed his opinion to be true so it was not misrepresentation.
statement of intention
a promise to do something in the future is not one a fact since a fact must relate to a past event or something in existence. it will however be held as a material fact if the maker has no intention of carrying out his intention
made by a party to the contract
a person is not liable for a statement made by other unless that person is his agent. for example a newspaper review of an item cannot be misrepresentation.
induces the other person to enter the contract
it must lead the other person into entering the contract and be a critical part of making the decision. The person must of relied on the statement made rather than on their own judgement / information they had obtained elsewhere. it doesn’t matter if the victim could have discovered the truth by taking reasonable steps or if it was unreasonable to rely on the statement. just the fact that it was relied upon is enough to make is a misrepresentation
Attwood v Small 1838
the seller of a mine made a false statement to the purchaser about the earring from a mine. The buyer instructed a surveyor to confirm this statement which he did incorrectly. The purchaser bought the mine and then discovered the statement to be untrue. There was no misrepresentation as the purchaser relied on the surveyor report and not he seller’s statement.
Redgrave v Hurd 1881
purchaser of a solicitors practice was given a set of accounts to look at. The seller verbally misled the purchaser as to the true earnings. he relied on the statement and didn’t look at the accounts. if he had he wouldn’t seen that the sellers statement was false. But it was seen as a misrepresentation as he did rely upon it.
s12 of the consumer rights act 2015
contain that a trader has to provide certain information to the consumer before it comes legally binding. a misleading omission the equivalent of a misrepresentation in this context means that a trader deliberately misses out key information that the consumer may need to make an informed decision about the product.
the trader must not :
omit material information that the average consumer would need hides or provide material information that unclear
fails to identify the commercial intent of the commercial practice if not already apparent form the context
what are the types of misrepresentation?
innocent misrepresentation
negligent misrepresentation
fraudulant misrepresentation