Misrepresentation Flashcards
What is the definition of a misrepresentation?
POOLE: an actionable misrepresentation is an unambiguous, false statement of fact made to the claimant that induces the contract and results in a loss.
UNAMBIGUOUS: Mcinerny v Lloyd FALSE: Avon v Swire Fraser STATEMENTS OF FACT: Kleinwort v Benson OR LAW: Packania v Hackney ADDRESSED TO THE MISREP'D PARTY: Com. Bank Sydney v Brown.
UNAMBIGUOUS?
Mcinerny v Lloyd
FALSE?
Avon v Swire Fraser
STATEMENT OF FACT/LAW?
Kleinwort v Benson/Packania v Hackney
ADDRESSED TO MISREP’D PARTY?
Com Bank Sydney v Brown
Statements may be oral or implied by conduct; elaborate.
Denning in CURTIS v CLEANING CHEMICALS: any behaviour.
GORDON v SELICO: Concealing.
SPICE GIRLS v APRILIA: taking part.
Can silence amount to a misrepresentation?
KEATES v EARL of CADOGAN: no general duty to disclose facts.
EXCEPTION:
- Half truths: Dimmock v Hallet.
- Continuing representations: WITH v O’FLANAGAN; if something later transpires to be untrue.
- FIDUCIARY RELATIONSHIP: Tate v Williamson.
Statements of opinion are not actionable misreps (BISSET v WILKINSON); but when are they elevated such?
If they are given by an expert: ESSO v MARDEN.
Are statements of future intention actionable?
No: Beattie v Edbury; and there is no duty to inform of a changed intention: Wadham v Wales.
UNLESS: the state of mind at the time of the misrep can be proven to have been false: EDGINGTON v FITZMAURICE; but difficult.
How does a statement induce a contract?
PAN ATLANTIC v PINE TOP: must be material.
If yes, then the inducement is presumed: SMITH v CHADWICK (provided it was acted upon: PEEKAY v AUS & NZ BANKING).
If no, inducement fails (Pan atlantic).
UNLESS: MUSEPRIME v ADHIL: if subjective reasonable test; if C can prove was induced.
Is there a general duty to check facts before relying on them?
REDGRAVE v HURD: NO.
But a court may say C should have reasonably checked: SMITH v ERIC BUSH.
& so if no check takes place they may refuse to deem inducement took place: HORSFAL v THOMAS.
OR if a check takes place and is wrong, relying on this means there has been no inducement: ATOOD v SMALL.
BUT if was fraudulent misrep then the check is discounted: PEARSON v DUBLIN.
Need not be the only inducing factor anyway: Edgington v Fitzmaurice.
What is the definition of fraudulent misrepresentation?
DERRY v PEEK: a false statement made knowingly, or without belief in tis truth, or recklessly careless whether it is true or false.
Thomas witter v TBP: recklessness is a flagrant disregard for the truth.
High burden of proof on the claimant!
What is the definition for negligent misrepresentation?
s2(1) MA 67: liable unless can prove had reasonable grounds to believe and did believe up until the time the contract was entered the facts were true.
Burden of proof on the defendant: Howard Marine v Ogden.
What is the definition of innocent misrepresentation?
s2(1) MA 67: when statement maker prove he believed what he said was true an had reasonable grounds to believe it true.
What is the definition of negligent misstatement?
A TORTIOUS CLAIM.
Hedley Byrne v Heller: needs a special relationship and must be reasonably foreseeable for someone to rely on the statement & be reasonable for the law to impose a duty (caparo) if none exists.
Unlikely to be used unless party is 3rd party to contract and this is the only way to sue.
Damages are limited by remoteness: Wagonmound.
What remedies are available for fraudulent misrep?
- RESCISSION: contract voidable; courts do what is practical and just: ERLANGER v NEW SOMBRERO.
- DAMAGES: all loses flowing from the transaction not rendered too remote by claimants actions: DOYLE v OLBY. Note: claimant must mitigate and any value retained is deducted from damages: SMITH NEW COURT v VICKERS
- INDEMNITY: WHITTINGTON v SEALE: for expenses incurred by contract.
- LOSS OF PROFITS: how much would have made if entered a similar contract elsewhere: EAST v MAUR; Note: not available if any amount of profit has been made.
What remedies are available for negligent misrep?
- RESCISSION: contract voidable; courts do what is practical and just: ERLANGER v NEW SOMBRERO.
- DAMAGES: HOWARD MARINE v OGDEN: fiction of fraud: confirmed in ROYSCOTT v ROGERSON: but curtailed somewhat by SMITH NC v VICKERS: only losses from the statement in question.
- INDEMNITY: WHITTINGTON v SEALE: for expenses incurred by contract.
- LOSS OF PROFITS: ROYSCOTT says yes; but Poole, argues no.
- DAMAGES IN LIEU OF RESCISSION? at the courts discretion if R would be a burden: SINDELL v CAMBRIDGE.
- Contributory negligence? GRAN GELATO: if a concurrent tort claim.
What are the bars to rescission?
- AFFIRMATION: LONG v LLOYD.
- LAPSE: LEAF v INT GALLERIES: 5 years too long.
For fraudulent: time from date of misrep. Neg: date of contract.
- IMPOSSIBILITY: CLARKE v DICKINSON.
Note: minor imperfections wont bar: ERLANGER.
- 3rd PARTY RIGHTS: PHILLIPS v BROOKS.
What is the potential impact of an exemption clause regarding misrepresentation?
May be voidable: UTCCR/MA s3.
HIH CASUALTY v CHASE MANHATTAN: of employees of firm but not own.
