Misrepresentation

Question 1

What is a Misrepresentation

Answer 1

A false statement of Fact or law made by one party to another

• It is not a term
• It induces the other party to enter into the contract

Question 2

Misrepresentation makes a contract?

Answer 2

Voidable

• Either rescind the contract
• Affirm Contract and Seek Damages

Question 3

Misrepresentation 4 Requirements

Answer 3

1) Unambiguous false statement of Fact or Law
2) Addressed to Misled Party
3) Intended to be Acted upon
4) Material and actually induced other party to enter into contract

Question 4

Must Not be a puff/opinion/ or belief

Answer 4

Bisset v Wilkinson

Question 5

Representation must be addressed to Mislead Party

Answer 5

Commercial Banking of Sydney v Brown

Question 6

Misrepresentation must be an inducement to entering Contract

Answer 6

Mislead party must have relied on the Misrepresentation

Smith v Eric Bush

Question 7

If you have no knowledge of msirep

Answer 7

If you don’t know about the misrepresentation they it didn’t induce you and it doesn’t operate
Horsefall v thomas

Question 8

If you know Misrepresentation is false

Answer 8

if you know its false and enter the contract anyways then you are bound by it
Atwood v Small

Question 9

Fraudulent Misrepresentation (3 requirements)

Answer 9

1) A statement that is False
2) You knowingly Made it
3) Without belief to the statements truth or very reckless as to its validity

Question 10

Innocent Misrepresentation

Answer 10

You think that you are telling the truth but you are in fact Not
Misrepresentation Act s.2 (2)
Newbigging v Adams
Derry v Peek

Question 11

Negligent Misrepresentation

Answer 11

Duty of Care Applies:
Party making the representation are not outright lying but due to their circumstances they should have better knowledge as to the statements validity and are held to a higher standard
Hedley Byrne v Heller
Esso v Marden

Question 12

Misrepresentation Act 1967 (4 requirements)

Answer 12

1) Misrepresentation made to the other party in the contract and induced entering
2) Party Suffers Actual Loss as a result of misrep
3) Fiction of Fraud: If it would have been fraud had the representation been knowingly made; then we treat it as fraud
4) Reverse the Burden of Proof on Representor: They have to prove that they had reasonable grounds to believe in the facts truth then innocent

Spice Girls v Aprila
Howard Marine v Ogden

Question 13

Damages for Fraudulent Misrepresentation

Answer 13

Tort of Deceit:
Aims to put the parties back to the position had the torn not been committed
-You must give back full compensation for all losses suffered!
East v Maurer
Smith New Court Securities Ltd v Citibank N.A

Question 14

Damages for Negligent Misrepresentation

Answer 14

Tort of Negligence:

Y is liable for all reasonably foreseeable losses

Question 15

Misrepresentation Act Damages

Answer 15

Put X in a position he would have been had there been no misrepresentation but as if it had been made Fraudulently:
* Allows for Damages for all losses which flow directly from the transaction.

Innocent Misrep also now allows Damages in lieu of Rescission

Question 16

Rescission

Answer 16

Protect the Representee but not to unjustly enrich them.

X gets back from Y the value Y obtained from Contract and X gives back to Y any benefit obtained.

Question 17

Rescission or Affirmation and Damages

Answer 17

You have a right to both:
Universal Finance v Caldwell

Right to Rescind Lost after Affirmation: Long v Lloyd
Right to Rescind Lost after Lapse of time:
Leaf v International Galleries