Misrepresentation

Question 1

What is a misrepresentation?

Answer 1

A false statement of existing or past fact or law made by one party (the ‘representor’) to another (the ‘representee’) before or at the time of the contract, which induces the representee to enter into the contract

Question 2

What is a representation?

Answer 2

A pre-contractual statement asserting truth but not a promise. If false, it constitutes a misrepresentation

Question 3

What is a term in the context of misrepresentation?

Answer 3

A binding promise that forms part of the contract. Misrepresentations can sometimes be construed as collateral warranties

Question 4

What is a mere puff?

Answer 4

Non-actionable exaggeration or sales talk, such as “Best product on the market!”

Question 5

What is fraudulent misrepresentation, and what are the remedies for this?

Answer 5

A false statement made knowingly, without belief in its truth, or recklessly as to its truth

Rescission and damages for tort of deceit

Question 6

What is negligent misrepresentation in common law?

Answer 6

Based on the tort of negligence (Hedley Byrne v Heller [1964])

Question 7

What are the 3 requirement for negligent misrepresentation?

Answer 7

1. Duty of care owed
2. Breach of duty with a false statement
3. Reliance and loss by the claimant

Question 8

What is innocent misrepresentation and what is the remedy for this?

Answer 8

A false statement made with reasonable belief in its truth.

Remedy: Discretionary damages in place of rescission (Misrepresentation Act 1967, s.2(2))

Question 9

What are the 4 steps to initiate a claim for misrepresentation?

Answer 9

1. Determine if the statement is a misrepresentation
2. Prove the statement induced the contract
3. Identify the type of misrepresentation
4. Confirm rescission isn’t barred (e.g., lapse of time)

Question 10

Can silence be considered a misrepresentation?

Answer 10

Silence does not usually constitute a misrepresentation, but partial disclosure or non-disclosure that distorts the truth may

Question 11

What must be proven for a misrepresentation to induce the contract?

Answer 11

The misrepresentation must be material and relied upon by the representee in entering the contrac

Question 12

What is rescission and what are the barriers to it?

Answer 12

Rescission restores the parties to their pre-contractual position

Barriers to rescission: lapse of time, affirmation, third-party rights