Misrepresentation

Question 0

Routledge v McKay [1954] 1 All ER 855

Answer 0

The time the statement is made is important, seller made it clear was not own knowledge

Question 1

Dick Bentley Productions v Harold Smith (Motors) Ltd [1995] 1 WLR 623 (CA)

Answer 1

Whether a warranty was intended depends on the conduct of their parties, on their words and behaviour, rather than on their thoughts.
The parties in this case had special knowledge so where more likely to be in breach of a warranty.

Question 2

Bannermam v White (1861) 10 CB (NS) 844

Answer 2

P put weight on the importance of sulphur not being used in cultivation of hops. The court held that importance attached to the statement was critical so was regarded as a term

Question 3

Oscar Chess v Williams [1957] 1 WLR 370 (CA)

Answer 3

Easy to infer warranty when seller states a fact knowing that the buyer will be ignorant to check, less easy when the seller makes it clear he has no knowledge and is passing information on such as in Routledge v McKay

Question 4

Esso Petroleum Company Ltd v Mardon [1976] 2 All ER 5

Answer 4

Petrol station case, remedy for misrepresentation and negligent misstatement. This representation was a term in the contract (that planning permission would not effect profits, Esso should have known better).
Specialist skill and knowledge was important

Question 5

Edgington v Fitzmaurice (1885) 29 Ch D 459

Answer 5

If a false statement of conduct is made it must be made dishonestly in order to be misrepresentation.
“There must be a false statement of an existing fact: but the state of a man’s mind is as much a fact as the state of his digestion” per Bowen LJ

Question 6

Bisset v Wilkinson [1927] AC 177

Answer 6

Statement that the farm could hold 2000 sheep was a statement of opinion so was not actionable… In exam consider “should fit” or “will fit” and implications of these different terms

Question 7

Notts Patent Tile Co v Butler (1886) 16 QBD 778

Answer 7

Making a misleading impression following not properly checking is a misrepresentation

Question 8

Curtis v Chemical Cleaning and Dyeing Co Ltd [1951] 1 KB 805

Answer 8

Signed a document after being told it removed liability for damage to sequins and beads, when in fact it removed liability for all damage. Court ruled this was misrepresentation

Question 9

With v O’Flanagan [1936] Ch 575

Answer 9

Failure to reveal the change of circumstances amounted to actionable misrepresentation. This case concerned a medical practice which diminished in value during negotiations

Question 10

Attwood v Small (1838) 6 Cl & Fin 232

Answer 10

A offered to sell mine with exaggerated statement of capacity. B hired expert to check who falsely agreed with A. Not an actionable misrepresentation as B had no relied on A’s statement

Question 11

Redgrave v Hurd (1881) 20 Ch D 1

Answer 11

A selling solicitors and misrepresented price, but offered B an opportunity to check books. Still an actionable misrepresentation although today damages would be reduced by contributory negligence. “The mere fact that a party has an opportunity of investigating… Is not sufficient to deprive him of his right to rely in misrepresentation” Baggallay LJ, CA

Question 12

Horsfall v Thomas (1862) 1 H & C 90

Answer 12

Claimant bought gun without inspecting. Concealed defect meant but no actions for misrepresentation as they were not aware so it did not induce them

Question 13

Peek v Gurney (1873) LR 6 HL 377

Answer 13

There must be some statement of fact, not mere non-disclosure.
It must also be addressed to the party misled.

Question 14

Derry v Peek (1889) 14 App Cas 337 (HL)

Answer 14

Fraudulent misrepresentation must be made: (1) knowingly, (2) without belief or truth, or (3) recklessly, careless whether it be true or false.
Facts of this case involved mistake regarding rights to run trams, not fraudulent misrepresentation as genuinely believed they could.

Question 15

Doyle v Olby [1969] 2 QB 158 (CA)

Answer 15

Where a misrepresentation is not a term, but an inducement, tortious damage is available (as opposed to contractual damage). This covers all consequential losses, looks backward.

Question 16

Smith New Court Securities Ltd v Scrimgeour Vickers (asset Management) Ltd [1996] 3 WLR 1051 (HL)

Answer 16

Rescission: puts the claimant back into the position he would have been had the fraudulent misrepresentation not been made

Question 17

East v Maurer [1991] 2 All ER 733 (CA)

Answer 17

Hairdresser claimed to move abroad so Mrs East bought salon. He didn’t and she struggled to compete.
House of Lords allowed her damages covering the profits she would have made had the defendant’s statement not been made.
Damages rewarded where: price paid minus selling price, trading losses, expenses of buying and selling and carrying out improvements, plus £10,000 foregone profits recoverable in tort which the claimant would have been expected to make in a similar hairdressing business.
Had there been a breach of contract profits would have been calculated particular to the business.

Question 18

Leaf v International Galleries [1950] 2 KB 86 (CA)

Answer 18

Lapse of time is a bar to rescission, affirmation

Question 19

Vigers v Pike (1842) 8 Cl & F 562

Answer 19

Impossibility of restitution: destruction of a piece of property that is part of the claim means no rescission

Question 20

Hedley Byrne v Heller [1964] AC 465 (HL)

Answer 20

The basis for negligent misstatement arises from a duty of care. The degree of knowledge is important. Whether it is reasonably foreseeable that the promise will be relied on is important.
Damages available are as if the tort had never happened, i.e. The statement had never been made

Question 21

Misrepresentation Act 1967, s 2(1)

Answer 21

Any misrepresentation should be treated as though it was made fraudulently (fiction of fraud)… Unless there are reasonable grounds to believe that the facts represented were true
Losses awarded = all consequential losses

Question 22

Howard Marine and Dredging Co Ltd v A Ogden & Sons (Excavation) Ltd [1978] QB 575 (CA)

Answer 22

Lloyd’s register case. Majority believed not reasonable grounds to believe and should have checked the barge’s individual documents. Many would agree Court of Appeal got it wrong, Lord Denning dissented.

Question 23

Royscott Trust v Rogerson [1991] 3 All ER 294

Answer 23

Defendants misrepresented amount of deposit car purchaser put down (as 20% not 16%). Tortious measures used, damages available where all consequential losses.

Question 24

Misrepresentation Act 1967 section 2(2)

Answer 24

No right to sue for misrepresentation where wholly innocent. However, entitled to rescission. Courts are given wide discretion to calculate damages to deal with cases where it would be a disproportionate response.

Question 25

William Sindall plc v Cambridgeshire CC [1994] 1WLR 1016 (CA)

Answer 25

Case where it would be more equitable to award damages than rescission. Cost of land £5million, cost of fixing unwanted sewer was £18,000. It would be disproportionate to ask for millions back so instead awarded damages of £18,000.

Question 26

Government of Zanzibar v British Aerospace (Lancaster House) Ltd [2000] 1 WLR 2333

Answer 26

Where there is a bar to rescission then damages are not available, this is because damages are only available as a more equitable solution to rescission

Question 27

Misrepresentation Act 1967 section 3

Answer 27

Terms restricting liability for misrepresentation must pass the reasonableness test outline in section 11 of UCTA 1977