Misrepresentation Flashcards
What is actionable misrepresentation?
A false statement off act which induces a party to enter a contract (this happens before contract is formed)
If there is misrepresentation what happens to the contract?
It becomes voidable
What governs misrepresentation?
Common law
Misrepresentation act 1967
What is the criteria to help establish misrepresentation?
A false statement of fact or law
Which is made before the contract is formed
And it must induce the claimant who relied upon it
What is a statement of law or fact NOT?
Statement of opinion
Sales talk/puffs
Statements of future intention
What case is relevant to statement of opinion?
Bissett v Wilkinson
Facts of Bissett v Wilkinson
C purchased land from D after D said it would suitable for 2000 sheep
After purchase C later found the land could not hold that many sheep
Outcome of Bissett v Wilkinson
The court found that this was a statement of opinion rather than fact because D had no knowledge of sheep farming it was an opinion
Case related to sales talk does not amount to a statement of fact
Dimmock v Hallet
Facts of Dimmock v Hallet
D described the land as ‘improbable and fertile’ during the sale of land
Outcome of Dimmock v Hallet
The courts described this as a puff rather than a representation, therefore it could not amount to a statement of fact
Explain how statements of future intention and misrepresentation…
The general rule is that it cannot be a fact if it is about the future as it has not happened yet
However, if someone has knowledge that it will happen then it can amount to a misrepresentation
What case is relevant to statements of future intention…
Edgington v Fitzmaurice
Facts of Edgington v Fitzmaurice
C was a shareholder in a business
He received a request for a loan from D to help grow the business
It was in fact to pay off his loans
C sought repayment of money on the grounds of misrepresentation
Outcome of Edgington v Fitzmaurice
It amounted to misrepresentation because it was an untrue intention as to the future of the money and what was going to happen to it
Therefore it was a misrepresentation and the money should be paid back
What format can misrepresentation make?
Writing
Orally
Conduct
NOT silence
What case is relevant to the format of misrepresentation?
Spice girls v Aprilla World Service
Facts of Spice girls v Aprilla World Service
Aprilla contracted the spice girls on May 6th 1998 to sponsor a concert tour
On May 29th 1998 Geri left the group
Outcome of Spice girls v Aprilla World Service
Aprilla stated the contract was based on the representation they would all work together.
Because she left, there was a misrepresentation by conduct
What case is related to the point that misrepresentation must be made before the contract is formed?
Attwood v Small
Facts of Attwood v Small
C was purchasing a mine and was told exaggerated statements about its capacity by D
C got this checked but their expertise erroneously said they were correct
6 months later they found out it was wrong and sought to rescind the contract
Outcome of Attwood v Small
Court held there has been no misrepresentation because they did not rely on the representation by the vendor
They relied on the verification of their agents
What are the three types of misrepresentation?
Innocent
Negligent
Fraudulent
What is innocent misrepresentation? What remedies are available?
When D genuinely believes the representation is true and has reasonable grounds for that belief
Remedy = recession or damages
What is negligent misrepresentation? Remedies?
D should know what they are doing will amount to a misrepresentation however they are ignorant (reword this)
Recession/damages
What governs negligent misrepresentation?
Common law
Misrepresentation act
What does the misrepresentation act state about negligent misrepresentation?
Negligent misrepresentation is a statement without reasonable grounds for belief in its truth
Burdens of proof is on D
Contract is required
special relationship is not required
Negligent misrepresentation under common law…
Burden of proof on claimant
No contract required
Special relationship is required
What case is relevant to negligent misrepresentation under common law?
Hedley Byrne Co Ltd v Partners
Facts of Hedley Byrne Co Ltd v Partners
C (an advertising agency) ask D (a bank) for a reference about one of their customers
D said customer would be able to meet financial obligations
Customer did not
Outcome of Hedley Byrne Co Ltd v Partners
The statements could amount to negligent misinterpretation because they carelessly made a false statement that c relied upon
What is a special relationship
At least 1 party has some special relationship and they can tell the other party will rely on this info
What is fraudulent misrepresentation? Remedies?
Burden of proof lies in the claimant
Lord Herschell defined it as ‘knowing to be false, without belief it was true’
Recession/damages
What case is relevant to fraudulent misrepresentation?
Derry v Peek
Facts of Derry v Peek
Lord Herschell defined fraudulent negligence as ‘a statement knowing to be false, without belief it us true’
What are the restrictions to the availability of recession?
Affirmation: a party has implied they wish to continue with contract
Laps of time: if too long it can be seen as affirmation
Rights if third party: if 3rd party has gained bona fida rights property then it won’t be available
It is impossible e.g subject matter has changed
Damages is more suitable remedy
What is recession? What type of remedy?
It is an equitable remedy which aims to put the parties the position they were in before the contract started
