Misrepresentation Flashcards
If there is no contract, what cause of action exists for a claimant in respect of a false preliminary statement? Case.
Tort - negligent misstatement. Under Hedley Byrne v Heller. Claimant must establish a duty of care by showing that there was a ‘special relationship’, in which the purpose of the advice was communicated, and the defendant knew the advice would be relied upon.
What 3 categories may a preliminary statement fall into? What is the consequence?
- Term - breach of contract; damages.
- Representation - voidable if a misrepresentation; rescission.
- Mere puff - no cause of action.
What 2 approaches will the court take to decide whether a statement is a term or a representation?
- Look at what parties intended.
2. If not clear what they intended, objective test - what would reasonable man consider the statement to be?
Give 3 examples where there is a presumption of a term. Cases.
- Seller has greater skill/knowledge - Dick Bentley v Harold Smith.
- Buyer makes it clear that statement is vital to contract - Bannerman v White.
- Seller tells buyer not to bother verifying the statement - Schawal v Reade.
Give 4 examples where there is a presumption of a representation. Cases. Exception to 1. Case.
- Buyer has greater skill knowledge - Oscar Chess v Williams.
- Seller asks buyer to verify the statement - Ecay v Godfrey.
- Long time lapse between statement and contract - Routledge v McKay.
- Statement oral and not repeated in written contract - Routledge v McKay. Though in some circumstances court may consider contract part-oral, part-written - Birch v Paramount Estates.
What 3 criteria must be met for a representation to be a misrepresentation? 2 cases. Exception to 1. Case. Qualification to 1. Case.
- False statement of fact (not opinion - Bisset v Wilkinson; unless opinion is not genuine, and claimant has no reason to doubt it because the defendant is best placed to know. It will then amount to implied statement of fact - Smith v Land and House Property Corp).
- Made before/at the time of contracting.
- Which induces the claimant to contract - this requires reliance on the statement - Attwood v Small. It does not need to be the only factor which induced the claimant to contract - Edgington v Fitzmaurice.
Can a representation be made by conduct? Case.
Yes - Spice Girls v Aprilia.
Can silence generally constitute a misrepresentation? 3 exceptions, 2 cases.
No, unless:
- Circumstances change, rendering previous statement false - With v O’Flanagan.
- You tell a half-truth - Curtis v Chemical Cleaning.
- Fiduciary duty to disclose the facts.
How must a claimant rescind a contract? What is the aim of rescission?
He must notify the defendant of his intention to rescind. The aim is to restore the parties to their pre-contractual position.
What are the 4 bars to rescission? 3 cases applying them to misrepresentation.
- Undue delay - Leaf v International Galleries.
- Affirmation - Long v Load.
- Impossible to substantially return property - Dowie v Crystal Palace.
- Innocent purchaser has acquired an interest in the property.
Under s2(1) Misrepresentation Act 1967, what else can the court award?
Damages.
On what basis will damages be awarded for fraudulent misrepresentation? What must the claimant prove?
Tortious basis - so remoteness rules will not apply, and claimant can claim compensation for all direct consequences. The aim is to put the claimant back to his pre-contractual position. However, claimant must show that the statement was fraudulent.
In what way are damages now awarded for non-fraudulent misrepresentation? Case.
Same as for fraudulent - tortious basis. Royscot Trust v Rogerson.
How can a claimant avoid liability for paying damages? Is this easy to do? Case.
They must show that they had reasonable grounds to believe that the statement was true. This is difficult to prove - Howard Marine & Dredging v Ogden.
