misrepresentation

Question 1

misrepresentation

Answer 1

a false statement of material fact made by a party of the contract that induces other party to enter the contract
- misrepresentation occurs during the formation of a contract, usually during the offer/negotiation stage.
- a false statement
- made by a party to the contract
- induces the other party to enter the contract.

• its definition can be broken down into parts which al need to be fulfilled for there to be a misrepresentation. ??????

Question 2

false statment

Answer 2

statement is usually written or verbal
it could be anything that could influence the other person decision
- e.g conduct
- statement must be false
- extent of knowledge of the statement will define what type of misrepresentation it will be.

Question 3

cases for false statement

Answer 3

-Spice Girls Ltd v Aprilia World Service BV
-Fletcher v krell; 1873

Question 4

Spice Girls Ltd v Aprilia World Service BV

Answer 4

they signed an sponsorship w Aprilia. while the agreement was being negotiated. Geri Halliwell had given notice to leave the group. Aprilia was unaware of this when they filmed the videos all girls were there but when she left the videos were worthless.

legal principle - all of them showed up to the videos there for none of them intended to leave. - This was a misrepresentation.

ask about this case

Question 5

Fletcher v Krell 1873

Answer 5

women applied for a job as governess. did not disclose she was divorced she was also not asked. in Victorian times she would not have got the job if she was divorced. .
not to be a misrepresentation because she was under no duty to disclose this as she was not asked.

legal principle - silence is not a misrepresentation, a false statement cannot be silence.

Question 6

silence exceptions

Answer 6

1. change of circumstances
2. making of half - truth
3. confidential relationships

Question 7

1. change of circumstances

Answer 7

statement may be true when it was made, it can come a misrepresentation if it becomes false before the contract is made.

with o flanagan

Question 8

change of circumstances key case

Answer 8

With v O’Flanagan

Question 9

With v O’Flanagan

Answer 9

doctor accurately stated the profit of his medical practise. However between the statement being made and the contract being made patients left.

legal principle - - misrepresentation as he had to tell the purchaser of the change of circumstances.

Question 10

2.Half - truth

Answer 10

if a statement is made is a half truth and the rest is kept silent. this can be a misrepresentation.
-what is kept silent. Not disclosure
- there is a duty to reveal the whole truth to a situation.

Question 11

key case for half truth

Answer 11

Dimmock v Hallet 1866

Question 12

Dimmock v Hallet 1866

Answer 12

seller of land told the purchasers truthfully there was tenants on the land. purchaser wanted this. However he did not tell the purchaser that all tenants were leaving.
legal principle-this part- truth is a misrepresentation

Question 13

confidential relationship

Answer 13

if the relationship is based on trust then silence may be a misrepresentation
e.g a doctor patient solicitor and client.
- all details must be disclosed whether they are aksed asked for or not.

Question 14

key case for confidential relationship

Answer 14

Tate v Williamson 1866

Question 15

Tate v Williamson 1866

Answer 15

financial advisor advised his client to sell his land for held the value. the advisor then brought this land without telling his client.
legal principle -
advisors failure to disclose he was intending to buy the land personally this is a breach of trust and it is a misrepresentation.

• seen in insurance

Question 16

2. Material Fact

Answer 16

• it would have led the person to make the contract.
• influences the mind of the person making the decision.
• must be a statement of fact not an opinion
• can also be a statement of future intention. if they do not intend to actout their intention this will be misrepresnattion.
  -if the opinion is not honesty made then it is a material fact and not an opinion.

Question 17

statement of opinion

Answer 17

if the maker of the statement genuinely believes the opinion they are stating. - it will not be a misrepresentation

however, if the opinion is not honesty made then it is a material fact and not an opinion.

Question 18

statement of opinion key case

Answer 18

Bisset v Wilkinson

Question 19

Bisset v Wilkinson

Answer 19

seller of farmhouse had never had sheep on it. when he was asked how any sheep would fit on his land he said around 2000. this was wrong.

legal principle - not misrepresentation if you genuinely believe his opinion to be true.

Question 20

statement of intention.

Answer 20

generally a promise to do something in the future is not one of fact.

• a fact must relate to past event or something in existence.
• it will be held as material fcat is the maker has no intention of carrying out his intention.

Question 21

3. made by a party to the contract

Answer 21

• a person is not liable for a statement made by others. unless that person is his agent

for example - a newpaper review of an item cannot be a misrepesentation. - do not get this confused with tort where this limitaion does not apply e.g negligent misrepresentation

Question 22

4. induces the other party ton enter the contract

Answer 22

it must lead the other person into entering the contract and can be a critical part of making that decision.

the person must have relied on the statement made rather than on their own judgement/information they have obtained elsewhere

key cases - Attwood v small
Redgrave v Hurd

Question 23

key cases for inducing the other party to enter the contract

Answer 23

key cases - Attwood v small
Redgrave v Hurd

Question 24

Attwood v small

Answer 24

seller of a mine made a false statement to the purchaser about the earnings from a mine the buyer instructed a surveyor to confirm this statement, which he did do incorrectly. purchaser bought the mine and then discovered the statement to be untrue.

• held there was no misrepresentation as the purchaser relied on the survey report and not the sellers statement.

. it doesn’t matter if the v could have discovered the ruth by taking reasonable steps or if it was unreasonable to rely on the statement. just the fact that to was relied upon is enough ton make it a misrepresentation.

Question 25

Redgrave v Hurd

Answer 25

purcahser of a solictors practise was given a set of accounts to look at. The seller verbally misled teh purcjhaser as to teh true earnings. he relied on the statment and didnt look at the accounts. held - seen as a misrepresentation as he relied upon it.

Question 26

misrepresentation - consumer context

Answer 26

s12 of the consumer rights cat 2015 contains that a trader has to provide certain information to the consumer before it becomes legally binding a misleading ommission (the equivilant of a misrepresentation in this context) means that a trader deliberatley misses out key infomation that the consumer might need to make and informed decision about the product. all consumer infomation muust be displayed clearly. the trader m,ust not . omit material infomation that teh average cosnumer would need . hides or provides material infomation that is unclear . fails to identify the commercial intent of the commercial practice if it not already apparent from teh context.

Question 27

Types of misrepresentation

Answer 27

1. innocent misrepresentation 2. negligent misrepresentation 3. fraudulent misrepresentation

Question 27

s12 of the consumer rights act

Answer 27

s12 of the consumer rights cat 2015 contains that a trader has to provide certain information to the consumer before it becomes legally binding

Question 28

innocent misrepresentation

Answer 28

- defined by the misrepresentation act 1967 - a false statment that is made honestly - teh person who made teh statemnt belived teh statment to be true and theres no negligence in that belief. - the remedy available will EITHER be damages or recession not both - if it under teh courts discretion, teh courts will decide which to award.

Question 29

remedy available for innocent misrepresentation

Answer 29

either damages or rescission not both

Question 30

negligent misrepresentation

Answer 30

this type was developed in 1964 through teh case Byrne v Heller - it is a statement made by a person who believed teh statment to be true, but had ni reasonable grounds to believe this.

Question 31

types of negligent misrepresentation

Answer 31

1. under common law tort of negligence 2. under the misrepresnetation act 1967 number 1 was

Question 32

Burden of proof

Answer 32

the victim must prove that there is a misrepresentation then the burden of proof is on the person making the statement to prove that there were reasonable grounds to believe the statement was true. usually in civil cases the burden of proof is on the victim therefore it is preferable for the victim to use the statutory form rather than the Hadley Byrne principle

Question 32

under common law tort of negligence

Answer 32

this was developed in the case of Byrne v Hedley which suggested a caliam for a misrepresnettaion based on neglignace would be alllowed.

Question 33

under the misrepresentation act 1967

Answer 33

s2 (1) created statutory liability for negligent misrepresntation which doesnt require there to be a special relationship between the parties. . this statute only requires for there to be misrepresntation which results in a contract and the victim suffersloss. . it i appropiate hwne the claimant is unable to prove fraud.

Question 34

influences on negligent misrepresentation

Answer 34

there are other factors that may influence the finding of negligent misrepresentation Howard v Marine V Ogden and Sons 1978

Question 35

Howard v Marine V Ogden and Sons 1978

Answer 35

HELD - Howard argued he has reasonable grounds to believe it was rue as they had checked lloyds register. This failed because they had teh registration documnet on the barge, which stated teh correct capacity. unlike to be aksed

Question 36

fraudulent misrepresentation

Answer 36

this is to do with deceit - trying to trick someoen - Derry v Peek defines it as when there is a statmnet made without belief in the tstamnet - this includes where the person knows it to be untrue, or reckless as to whether or not is is true.

Question 37

Derry v Peek

Answer 37

held - defines it as when there is a statement made without belief in the statement

Question 38

remedies for misrepresentation

Answer 38

innocent misrepresentations recession - equitable rmedy. they want to put the party ack to the poeition they were in before eh contact ever happenened

Question 39

why do you think cours want to award recission rather than damages for misrepresntation

Answer 39

it is becuaee the misrepresnettaon induced in contrac, and had the misrepreentation party known the truth there would be no ocntract . recission will not be available in the ollowing siuation

Question 40

recission will not be available in the ollowing siuation

Answer 40

1. restitution to the original pre-conract position is imossible example - clarke v dickson 1858 2. the contract is ffiremned - longv looyd 1958 3. delay - leaf ve international galleries 4. a third party has gained ghts oer the property

Question 41

key case forresitution to the oiginl pre-contract position is mpossible

Answer 41

clarke v dickson 1858

Question 42

clarke v dickson 1858

Answer 42

claimant was misled ito becomin a partner. recession wsn aailable - he coulndt return the partnershp as the firm had become a liited company

Question 43

key case for the contract is affirmed

Answer 43

long v lloyd 1958 this means tht the innocnt party decided to carry on with the contract depite being aware of the misrepresnetion. the right to seek to rescid the contract is then lost

Question 44

long lloyd 1958

Answer 44

claimant was told hat the lorry was in great condition but shrtly fater the sale it broke down. C contcted D who offered to pay half the repairs. which c agreed t. Lorry broke down and claimant wanted to rescid. court held becuse by persevering with th elorry afte the first break dwn and agreeing the hsrae of costs of repai. he had indicated willingness to continue with the contract and so affirmed eh contract

Question 45

key case for delay

Answer 45

leaf v international galleries 1950 delay - the contract has been completed then after a delay, the claiman realises there has been a misrepresentation and tries to claim for this. thi sis becuase the courts can asume that if n issues have arisen in a short period following teh contract then there can be noting majorly wrong wth the contrat

Question 46

leaf v international galleries 1950

Answer 46

1944 the claimant brought a picture from the d. claimant was told that it was by te famous artss constable. tried to sell it 5 yeras later and realsied it was fake. recission was not aloud because of teh delay brininging his claim

Question 47

key case fo a third part as gained righter over the propertty

Answer 47

lewis v aveay if someone else has claimed interests in the goods, rescissin wont be vaialbale as this owuld be unfair on the innocent third party

Question 48

lewis v averay

Answer 48

lewis osld is car and the buyer tok teh car n exchnge for a cheque. thee cheque was worthless becuase it was a fraudster who had signed it. they then sold it on to na innocnet thid party. th original seller claimed recsison and wanted hsi car back but it had aleady been given to a third party.

Question 49

followg from the third party gaining rights over the property

Answer 49

damages are not usually availbal for innocent misrepresnetation nd are not an as right remedy - hweer if recission is not avaialbe because of teh past scenerio the court has teh discretion to award damages in lace of recession due to s2(2) of the msrepresntation act 1967

Question 50

negliget misrepresntation remedies

Answer 50

remedies are recission and/or damages recisison is availbae i teh same circumatance as before -the remedy of damges, if the hedley bryne principle i pplied are claculatd accordng to the low of tort this means contributory negligence also applies, so damages may be deducted accodigy - if the claim is under teh misrepresntation act 1967 then damages are also calculatd according to tort measure

Question 51

fraudulent misrepresnttion - remdies

Answer 51

remedies are rcsission and damages in tort of deceit tehdamages aim to put the victim bavk in the posiitiion tey were in before the misrepresnation ocured however they will sometimes award compensatory amages in certain ircumstances - for los of profit too

Question 51

damages n contract vs tort

Answer 51

the aim in contract is to put the claimat i the postiton as if teh contract had been peformed damages in tort aim to put them back in their pre-incident positon. it does not cse abould los of bargain like contract does.