Misrepresentation Flashcards
What is misrepresentation
A representation that is untrue
A misrepresentation makes the contract voidable. This means the contract is valid unless the person who has suffered the misrepresentation takes action to end the contract
This is called rescission
Difference between rescission and repudiation
Repudiation occurs when there is a breach of a contract. This entitles the person who suffers the breach to end the contract
Rescission is when there is a misrepresentation. The person suffering the misrepresentation must take action to make the contract void. If the contract is void both parties should be back in the position they were in before they entered the contract
For there to be a misrepresentation there must be:
A false statement
Material fact
Made by a party to the contract
Induces the other party to enter the contract
Fletcher v Krell
- False statement
Silence cannot be a misrepresentation
With v O’Flanagan
- False statement
a statement can be true initially but becomes a misrepresentation by the time of making the contract
Tate v Williamson
- False statement
when the relationship between parties is based on trust, then silence may be a misrepresentation
Dimmock v Hallett
- False statement
silence can be a misrepresentation where a statement made is a half truth
Spice girls Ltd v Aprilla
- False statement
statement does not need to be verbal. Actions can be a statement
The Consumer Insurance (Disclosure and Representations) Act 2012
A consumer need not volunteer information but has a duty to answer questions honestly and reasonably
Material fact
must influence the mind of the person making the contract
Bisset v Wilkinson
- Material fact
must be a statement of fact not opinion (it was a statement of opinion, so it was not a misrepresentation)
What is a statement of intention
A statement of intention is a promise to do something in the future. This is not a statement of fact unless the person making the statement has no intention of carrying out
made by a party to the contract
e.g. a review of an item cannot be a misrepresentation
Attwood v Small
- Induces the other party to enter into a contract
the person must have relied on the statement rather than their own judgement
Redgrave v Hurd
- Induces the other party to enter into a contract
it does not matter if the victim could have found out the truth by taking reasonable steps
S.12 of The Consumer Rights Act 2015
The trader has to provide certain information to the consumer before the contract becomes binding – if this information is not given then it amounts to a misrepresentation
It is considered to be misleading when a trader deliberately misses out key information that the consumer might need to make an informed decision
which act are the types of misrepresentation and remedies included in
The Misrepresentation Act 1967
Types of representation and remedies
- Innocent - rescission or damages
- Negligent - rescission and damages
- Fraudulent - rescission and damages
Type of misrepresentation - Innocent
(false statement made honestly without negligence) – rescission (party who has suffered the misrepresentation can seek to make the contract void) or damages
Type of misrepresentation - Negligent
(person who made the statement believed it to be true but had no reasonable grounds to believe it was true, burden of proof on the person who made the statement to give reasonable grounds as to why they believed it to be true) - injured party can seek remedies under the law of tort or under the Misrepresentation Act which can be rescission and damages
Type of misrepresentation - Fraudulent
(a person induces the contract by making a statement that they know is not true or is reckless as to whether it is true) - rescission and damages
