Misrepresentation Flashcards
what is misrepresentation
a false statement of fact or law which induces the other party to enter the contract
what 5 things must there be for a misrepresentation
1) a false/ untrue statement
2) of material fact
3) made by a party to the contract to the other
4) the statement complained of must have been made before or at the time of the contract
5) the statement induces the other party to enter the contract
what case states that the statement is usually written/ verbal but can be anything that influences the other party’s decision e.g. actions/ conduct
Spice Girls Ltd. v Aprilia
what case states that silence cannot be a misrepresentation + PoL
Fletcher v Krell: no misrepresentation as applicant under no duty to disclose her status + she was not asked about it
what 4 situations must be considered (false/ untrue statement) - 4 cases
a) silence can be misrepresentation if statement made is a half truth - Dimmock v Hallett
b) if a statement made was true at time but becomes untrue/ in accurate before contract made, representor must clarify the change - With v O’Flanagan
c) if a relationship based on trust then silence may prove to be a misrepresentation - Tate v Williamson
d) if contract is one of ‘upmost good faith’ all material facts must be disclosed whether asked or not - Lambert v Cooperative Insurance Society
under 2) of material fact, what must the statement have led a person to do
make contract + influence the mind of them
in what case was the statement one of opinion + so could not be a misrepresentation
Bissett v Wilkinson
what case stated that a statement of intention to act in a particular way in the future may be a statement of fact if representor did not have that intention when making statement
Edington v Fitzmaurice
no misrepresentation when untrue statement is made by a third party, for example
newspaper review of an item cannot be a misrepresentation
what case stated that the statement complained of must have been made before/ at time of contact
Roscorla v Thomas
what case states that it is not enough for v to prove statement is untrue - the statement must be important to the making of the contract
Attwood v Small
it is not a defence for representor to claim…(2)
• v should have discovered truth by taking reasonable steps
• v was unreasonable for trying in the untrue statement
what case stated that the fact the untrue statement is relied on is not enough to make it a misrepresentation
Redgrave v Hurd
what 3 types of misrepresentation are there
1) fraudulent misrepresentation
2) innocent misrepresentation
3) negligent misrepresentation
what is fraudulent misrepresentation
representor intentionally lied about the fact/ been reckless as to it’s truth
in what case was the statement not a fraudulent misrepresentation as the directors were only careless as to whether what they said was true
Derry v Peek
what are the remedies for fraudulent misrepresentation
rescission and/ or damages
what is the aim of rescission
put C in pre-contractual position
what kind of remedy is rescission, and so what is it
equitable remedy so given at courts discretion
when is rescission not available (4)
- returning to pre-contractual position impossible
- contract is affirmed
- delay
- a 3rd party has gained right over the property
what is the aim of damages
to return innocent party to position they would have been in it misrepresentation + contract had never been made
what is innocent misrepresentation
clarified by Misrepresentation Act 1967 as when representor genuinely believes statement to be true + is not at fault
what remedies are available for innocent misrepresentation
rescission or damages
under innocent misrepresentation, does innocent party have right to damages + what will courts take into account
no but court has discretion to award them instead of rescission under s2(2) Misrepresentation Act 1967. will take into account:
• loss to innocent party
• hardship caused to representor if contract rescinded
what is negligent misrepresentation
where representor has been careless + has no reasonable grounds to believe statement is true
what 2 types of negligent misstatement are there
- common law tort of negligence
- misrepresentation act 1967
in what case did HoL set out various conditions for a successful claim for negligent misrepresentation under law of tort (+ 2 examples)
Hedley Byrne - ‘special relationship’ and ‘proximity’ between v + representor
what section of misrepresentation act 1967 created statutory liability for negligent misstatement + what does this mean
s2(1) - all that is needed is a misrepresentation which results in a contract + v suffers loss (no need for special relationship/ proximity)
under negligent misstatement, once C proved there was a misrep., who is the onus then on to prove what?
D to prove there were reasonable grounds for him to believe statement was true (this reverses the burden of proof in civil cases)
in what case was there a misrepresentation as representor did not prove there were reasonable grounds to believe statement was true
Howard Marine v Ogden
under negligent misstatement, what choice does C have
suing under Misrepresentation Act 1967 or under the law of tort
what remedies are available for negligent misrepresentation
rescission and/ or damages (contributory negligence applies here so damages may be reduced)
under negligent misstatement, when will rescission be granted
at courts discretion - will only grant if fair to both parties
when will courts not grant rescission (negligent misstatement) - 3 + 2 cases
• affirmation - once aware of full facts, he indicates that he accepts contract - Long v Lloyd
• delay/ lapse of time - Leaf
• impossibility of returning parties to original positions (N/A in fraud misrep.)
under negligent misrepresentation, how are damages calculated
using “out of pocket” rule - all actual damage/ loss directly from misrep. claimable —> more generous than equivalent rule in ordinary BOC + tort
what case stated that court will award damages even if they are not foreseeable to D, provided causation can be proved
Smith New Court
