misrepresentation Flashcards
misrepresentation
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. ??????
false statment
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.
cases for false statement
-Spice Girls Ltd v Aprilia World Service BV
-Fletcher v krell; 1873
Spice Girls Ltd v Aprilia World Service BV
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
Fletcher v Krell 1873
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.
silence exceptions
- change of circumstances
- making of half - truth
- confidential relationships
- change of circumstances
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
change of circumstances key case
With v O’Flanagan
With v O’Flanagan
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.
2.Half - truth
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.
key case for half truth
Dimmock v Hallet 1866
Dimmock v Hallet 1866
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
confidential relationship
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.
key case for confidential relationship
Tate v Williamson 1866
Tate v Williamson 1866
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
- Material Fact
- 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.
statement of opinion
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.
statement of opinion key case
Bisset v Wilkinson
Bisset v Wilkinson
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.
statement of intention.
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.
- made by a party to the contract
- 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
- induces the other party ton enter the contract
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
key cases for inducing the other party to enter the contract
key cases - Attwood v small
Redgrave v Hurd
Attwood v small
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.
Redgrave v Hurd
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.
misrepresentation - consumer context
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.
Types of misrepresentation
- innocent misrepresentation
- negligent misrepresentation
- fraudulent misrepresentation
s12 of the consumer rights act
s12 of the consumer rights cat 2015 contains that a trader has to provide certain information to the consumer before it becomes legally binding
innocent misrepresentation
- 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.
remedy available for innocent misrepresentation
either damages or rescission not both
negligent misrepresentation
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.
types of negligent misrepresentation
- under common law tort of negligence
- under the misrepresnetation act 1967
number 1 was
Burden of proof
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
under common law tort of negligence
this was developed in the case of Byrne v Hedley which suggested a caliam for a misrepresnettaion based on neglignace would be alllowed.
under the misrepresentation act 1967
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.
influences on negligent misrepresentation
there are other factors that may influence the finding of negligent misrepresentation
Howard v Marine V Ogden and Sons 1978
Howard v Marine V Ogden and Sons 1978
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
fraudulent misrepresentation
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.
Derry v Peek
held - defines it as when there is a statement made without belief in the statement
remedies for misrepresentation
innocent misrepresentations
recession - equitable rmedy. they want to put the party ack to the poeition they were in before eh contact ever happenened
why do you think cours want to award recission rather than damages for misrepresntation
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
recission will not be available in the ollowing siuation
- restitution to the original pre-conract position is imossible
example - clarke v dickson 1858 - the contract is ffiremned - longv looyd 1958
- delay - leaf ve international galleries
- a third party has gained ghts oer the property
key case forresitution to the oiginl pre-contract position is mpossible
clarke v dickson 1858
clarke v dickson 1858
claimant was misled ito becomin a partner. recession wsn aailable - he coulndt return the partnershp as the firm had become a liited company
key case for the contract is affirmed
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
long lloyd 1958
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
key case for delay
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
leaf v international galleries 1950
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
key case fo a third part as gained righter over the propertty
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
lewis v averay
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.
followg from the third party gaining rights over the property
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
negliget misrepresntation remedies
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
fraudulent misrepresnttion - remdies
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
damages n contract vs tort
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.
