Misrepresentation Flashcards
What is misrepresentation?
A misrepresentation is an untrue statement of fact by one party which has induced the other party to enter into the contract.
What effect does misrepresentation have on a contract?
Misrepresentation renders a contract voidable, allowing the innocent party to choose whether or not to end the contract.
What are the three elements of misrepresentation?
- There must be an untrue statement. 2. It must be a statement of fact, not just opinion. 3. It must have induced the innocent party to enter the contract.
What is an untrue statement in the context of misrepresentation?
An untrue statement may be in any form—spoken, written, or conduct.
Can silence about a change of circumstances be misrepresentation?
Yes, keeping silent about a change of circumstances can amount to misrepresentation.
What distinguishes a statement of fact from an opinion in misrepresentation?
An opinion cannot be misrepresentation; it must be a statement of fact.
What is an example of a case involving misrepresentation of fact?
In Bisett v Wilkinson, the land had never been used for sheep, so the statement made was not considered a fact.
What must the misrepresentation do to the innocent party?
The misrepresentation must be at least one of the reasons that induced the other party to enter into the contract.
What are the types of misrepresentation?
- Fraudulent misrepresentation. 2. Negligent misrepresentation. 3. Wholly innocent misrepresentation.
What is fraudulent misrepresentation?
A false statement made knowingly, without belief in its truth, or recklessly as to whether it is true or false.
What is negligent misrepresentation?
A false statement made by a person who believes it to be true but has no reasonable ground for such belief.
What is wholly innocent misrepresentation?
A false statement made honestly believing it to be true, without any fault.
What are the remedies for misrepresentation?
- Rescission. 2. Damages.
What is rescission?
An equitable remedy designed to restore parties to their pre-contractual position, available for all three types of misrepresentation.
What are bars to rescission?
- Affirmation. 2. Lapse of time. 3. Impossible to return to pre-contractual position. 4. A third party has acquired rights.
What are damages in the context of misrepresentation?
Available for most types of misrepresentation; the innocent party may still choose to continue with the contract despite the misrepresentation.
How are damages for misrepresentation calculated?
Using the tort measure: put the claimant back in the position held before the wrong was committed by making good any losses caused by misrepresentation.
How are damages for breach of contract calculated?
Put the claimant in the position they would have held if the contract had been performed as agreed.
