Misrepresentation Flashcards
What is misrepresentation?
A false statement of fact or law, made by one contracting party to another, which induces the other party to enter into the contract
Statement of fact or law not intention or opinion
Bisset v Wilkinson
Facts: • A farmer wasn’t a sheep farmer but expressed his opinion
L.P: • Statement was held to be that of an opinion
Exceptions to statement of opinion:
1.) Smith v Land and House prop. Corp
Facts: • Said a person was a good tenant but knew he hadn’t paid rent
L.P: • Opinion is contradicted by other facts known to the person giving that opinion
Exceptions to statement of opinion:
2.) Esso Petroleum v Mardon
Facts: • C estimated he future sales of a garage
• On this information, D entered into a tenancy
• After permission was granted, entry from nearby highway was not permitted
Judgment: contract not rescinded but damages awarded
L.P: • Statement of opinion came from an expert
Exceptions to statement of opinion:
3.) Edgington v Fitzmaurice
Facts: • A company prospectus which was designed to attract subscribers contained false statements about what the money would be raised for
• Money was used to pay off debts
Judgment: Contract could be rescinded
L.P: • Statement of opinion/ intention is not genuinely held
“The state of a mans mind is as much a fact as the state of his digestion”
Statements of Law:
Kleinwort Benson v Lincoln City Council
L.P: • Mistake of Law could lead to an action for restitution of money paid
Misrepresentation by Conduct:
Spice Girls v Aprilla World Service
L.P: • They knew a member was going to leave shortly so misrep by conduct
Misrepresentation by silence:
Dimmock v Hallet
Facts: • D told C that all the farms were under tenancy which was factually true
• C bought land
• D failed to mention that all tenants had given notice
Judgment: Contract could be rescinded
L.P: • Misrepresentation from half truths can allow a contract to be rescinded
Misrepresentation by Silence
With v O’Flanagan
Facts: • A doctor was seeking to sell his practice
• He told a prospective purchaser income was £2,000
• Doctor became ill and business declined so when it was eventually sold it was averaging £5 a week
•C sought to rescind
Judgment: C could rescind
L.P: • situation has changed -> failure to notify other party of an earlier statement no longer being true equates = misrepresentation
Misrepresentation must induce the contract:
Edgington v Fitzmaurice
Failing to make inquires will not prevent a claim
Redgrave v Hurd
What are the four types of misrepresentation?
Fraudulent Misrepresentation
Negligent Misrepresentation
Innocent Misrepresentation
Negligent Misstatement
Fraudulent Misrepresentation
Tort of Deceit
Negligent Misrepresentation
Misrepresentation Act 1967
Innocent misrepresentation
Honest belief in truth and has reasonable grounds for that belief
