Misrepresentation

Question 1

What is misrepresentation

Answer 1

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

Question 2

Difference between rescission and repudiation

Answer 2

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

Question 3

For there to be a misrepresentation there must be:

Answer 3

A false statement

Material fact

Made by a party to the contract

Induces the other party to enter the contract

Question 4

Fletcher v Krell

Answer 4

• False statement
  Silence cannot be a misrepresentation

Question 5

With v O’Flanagan

Answer 5

• False statement
  a statement can be true initially but becomes a misrepresentation by the time of making the contract

Question 6

Tate v Williamson

Answer 6

• False statement
  when the relationship between parties is based on trust, then silence may be a misrepresentation

Question 7

Dimmock v Hallett

Answer 7

• False statement
  silence can be a misrepresentation where a statement made is a half truth

Question 8

Spice girls Ltd v Aprilla

Answer 8

• False statement
  statement does not need to be verbal. Actions can be a statement

Question 9

The Consumer Insurance (Disclosure and Representations) Act 2012

Answer 9

A consumer need not volunteer information but has a duty to answer questions honestly and reasonably

Question 10

Material fact

Answer 10

must influence the mind of the person making the contract

Question 11

Bisset v Wilkinson

Answer 11

• Material fact
  must be a statement of fact not opinion (it was a statement of opinion, so it was not a misrepresentation)

Question 12

What is a statement of intention

Answer 12

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

Question 13

made by a party to the contract

Answer 13

e.g. a review of an item cannot be a misrepresentation

Question 14

Attwood v Small

Answer 14

• Induces the other party to enter into a contract
  the person must have relied on the statement rather than their own judgement

Question 15

Redgrave v Hurd

Answer 15

• 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

Question 16

S.12 of The Consumer Rights Act 2015

Answer 16

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

Question 17

which act are the types of misrepresentation and remedies included in

Answer 17

The Misrepresentation Act 1967

Question 18

Types of representation and remedies

Answer 18

• Innocent - rescission or damages
• Negligent - rescission and damages
• Fraudulent - rescission and damages

Question 19

Type of misrepresentation - Innocent

Answer 19

(false statement made honestly without negligence) – rescission (party who has suffered the misrepresentation can seek to make the contract void) or damages

Question 20

Type of misrepresentation - Negligent

Answer 20

(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

Question 21

Type of misrepresentation - Fraudulent

Answer 21

(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