Misrepresentation

Question 1

Define misrepresentation

Answer 1

A statement of material fact made by one party to a contract to the other party during the negotiations leading up to the formation of contract which was intended to operate and did operate as an inducement under the contract, and which was untrue or incorrectly stated

Question 2

What 3 things cant a misrepresentation be

Answer 2

A mere opinion - Bissett v Wilkinson
An expression of future intent - Edgington v Fitzmaurice
A mere trade puff - Carlill v Carbolic smoke ball

Question 3

Fraudulent misrepresentation

Answer 3

If a person makes a false statement which he or she does not believe to be true at the time, this is a fraudulent misrepresentation - Derry v Peak

Question 4

Negligent misrepresentation

Answer 4

Damages may be recovered for a negligent misrepresentation where a financial loss has been incurred and where there is a special relationship between the parties - Hedley Byrne

Question 5

3 requirements for negligent misrepresentation

Answer 5

1. Party making statement must be in possession of the particular type of knowledge for which the advice is required
2. There must be sufficient proximity between the 2 parties that it is reasonable to rely on the statement
3. Party who statement is made to does rely on statement and party making it does rely on the statement

Question 6

Innocent misrepresentation

Answer 6

Any misrepresentation made not fraudulently was historically classed as innocent

Question 6

Remedy of rescission

Answer 6

Rescission is an equitable remedy that means parties no longer need to complete the obligations under the contract.

Question 7

Attwood v Small

Answer 7

The claimant was unsuccessful. By getting his own experts to check out the reports he had not relied
on the accounts but his own judgment.

Question 8

Derry v Peek

Answer 8

The statement was not fraudulent but made in the honest belief that approval was forthcoming.
Lord Herschell defined fraudulent misrepresentation as a statement which is made either:
1. Knowing it to be false,
2. Without belief in its truth, or
3. Recklessly, careless as to whether it be true or false.

Question 9

Doyle v Olby

Answer 9

Contractual damages are not applicable to misrepresentation since a representation is not a term of a contract. Where there has been a fraudulent misrepresentation damages should be assessed in the tort of deceit.

Question 10

SPICE GIRLS LTD V APRILIA WORLD SERVICE

Answer 10

Here the group knew that the other party was relying upon a representation, and could not discharge the requirement to show that they did not know of its falsity, and were liable in damages to the defendant.

Question 11

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