Misrepresentation Flashcards
Edgington v. Fitzmaurice 1885
Defendant company sent circular to shareholders asking for loans totaling £25000.
Claimed loan was to be used to grow the business, actually to pay off debt.
Held: Claims as to use of funds amounted to misrepresentation.
UNTRUE STATEMENT OF FUTURE INTENT = MISREPRESENTATION OF FACT (Even though fact does not technically exist as anything other than speculation at the time)
Bissett v. Wilkinson 1927
Claimant purchased land from defendant.
D stated that he believed the land to be suitable for up to 2000 sheep.
Both parties knew no sheep had ever been kept on the land.
Land could not commodity sheep.
Held: Parties not entitled to consider D’s statements as anything other than opinion.
OPINIONS NOT ACTIONABLE AS MISREPRESENTATIONS
Keates v. Cadogan 1851
A landlord who was letting his house did not tell the tenant that it was in a ruinous condition.
Held: Silence can not amount to a misrepresentation.
With v. O’Flanagan 1936
Parties involved in sale of medical practice.
Between agreement and actual sale, value of practiced had decreased significantly.
Held: Change in circumstances necessitated disclosure.
Silence does not amount to misrepresentation rule does not apply if circumstances change.
Spice Girls v. Aprilia World Service BV 2000
Aprilia sponsored band tour.
Sponsorship based on five members.
Geri left the band one month later.
Held: The participation of all five band members in the commercial had induced Aprilia into entering the contract.
Misrepresentation by conduct.
Split clearly forthcoming at time contract was entered into.
Horsefall v. Thomas 1862
The buyer of a gun did not examine it prior to purchase.
A defect in the gun was concealed.
Held: Concealing the defect in the gun did not affect the claimant’s decision to purchase.
Since he was unaware of the misrepresentation, he could not have been induced into the contract by it. His claim failed.
Attwood v. Small 1838
Claimants had purchased mine from D.
D had exaggerated earning potential of mine, which had been erroneously verified by an independent valuation.
Held: D may have misrepresented value, but it was not relied upon by C, they relied upon their independent valuation.
Claim failed.
MISREPRESENTATION MUST BE RELIED UPON
JEB Fasteners Ltd v. Marks Bloom & Co. 1981
Defendants had released inaccurately audited accounts.
Claimants took over company.
D had asked C, among others, for a loan.
C knew of financial difficulties of D at takeover, but wanted to secure two experienced executives.
Later claimed for misrepresentation based on accounts.
Held: Accounts did not induce takeover, executives did.
Misrepresentation not relevant, can not be actioned.
Derry v. Peek 1889
D authorized to run trams by animal or, with permission, steam.
Released prospectus saying steam would be used.
C bought shares based on this.
D did not obtain permission for steam, C claimed fraudulent misrepresentation.
Held: D did not believe prospectus to be untrue, so did not knowingly misrepresent.
Hedley Byrne v Heller 1963
C had asked D (A bank) for advice regarding financial health of third party that C had planned to work with.
D stated that they could meet the financial demands of deal.
They could not.
C claimed against D for negligent misrepresentation .
Held: Negligent statements could attract liability for pure economic loss.
‘Special relationship’ required.
Esso Petroleum & Co. Ltd v. Marden 1976
C had entered into business with D to operate an Esso petrol station.
Representative stated that station would do 200,000 gallons of business annually.
Station forced to move by council, was neither visible nor accessible from main road, resulting in less than 85,000 gallons in sales.
C lost whole investment and was chased for back rent by Esso.
Held: Failure to disclose change in circumstances amounted to negligent misrepresentation.
Esso liable (Misrepresentation had induced C into contract.)
Misrepresentation Act 1967, section 2(1)
Where a person has entered into a contract after a misrepresentation has been made to him by another party thereto and as a result thereof he has suffered loss, then, if the person making the misrepresentation would be liable to damages in respect thereof had the misrepresentation been made fraudulently, that person shall be so liable notwithstanding that the misrepresentation was not made fraudulently, unless he proves that he had reasonable ground to believe and did believe up to the time the contract was made that the facts represented were true.
Misrepresentation Act 1967, section 2(2)
Where a person has entered into a contract after a misrepresentation has been made to him otherwise than fraudulently, and he would be entitled, by reason of the misrepresentation, to rescind the contract, then, if it is claimed, in any proceedings arising out of the contract, that the contract ought to be or has been rescinded, the court or arbitrator may declare the contract subsisting and award damages in lieu of rescission, if of opinion that it would be equitable to do so, having regard to the nature of the misrepresentation and the loss that would be caused by it if the contract were upheld, as well as to the loss that rescission would cause to the other party.
