Misrepresentation Flashcards
Term
A part of the contract which if untrue Provides a Remedy for Breach of Contract
Representation
A Statement made by one party to the contract which May have Induced the other party to Enter the Contract, but Doesn’t Form Part of it
Mere Sales Puff
An Obviously Extravagant claim providing No Right of Action
Statement is More Likely to be a Term if - The Party making the statement has Greater Skill / Knowledge than the Recipient
Dick Bentley Ltd v Harold Smith
Statement is More Likely to be a Term if - The statement is of Vital Importance to the contract
Bannerman v White
Statement is More Likely to be a Term if - Maker of the statement Tells the other Not to Bother Checking It Out
Schawel v Reade
Statement is More Likely to be a Representation if - The Recipient of the statement has Greater Skill / Knowledge (Private Individual v Car Dealership)
Oscar Chess v Williams
Statement is More Likely to be a Representation if - There was a Long Time Lapse Between the Statement and the Contract
Routledge v McKay
Statement is More Likely to be a Representation if - The Maker of the statement asks the Recipient to Verify it
Ecay v Godfrey
Statement is More Likely to be a Representation if - The statement is Oral and Not Repeated in the Written Contract
Routledge v McKay
But; Where an oral statement is Not Followed up in Writing, the contract could be deemed to be Part Written, Part Oral, therefore, could be a Term - Birch v Paramount Estates
If Statement is a Representation – Consider Misrepresentation
A False Statement of Fact made by One Contracting Party to Another Before the Contract was made and which was One of the Factors which Induced the Other Party to Enter into the Contract
Misrepresentation - ‘False Statement of Fact’ [oral / in writing / by conduct] - Statement must be one of Fact Not Opinion
Bisset v Wilkinson
Unless, it is an Implied False Statement of Fact; i.e.:
• The Opinion is not Genuine
• There are No Reasonable Grounds for the Maker to Believe it is True – Statement Maker Knows of the Facts that Justify the Statement / Opinion - Smith v Land and House Property Corporation
Misrepresentation - ‘False Statement of Fact’ [oral / in writing / by conduct] - A Misrepresentation can be made by Conduct
Spice Girls v Aprilia
Misrepresentation - ‘False Statement of Fact’ [oral / in writing / by conduct] - The Statement must Not be one of Intention – Unless the Intention was Never Really Held
Edgington v Fitzmaurice
Misrepresentation - ‘False Statement of Fact’ [oral / in writing / by conduct] - Silence does Not Constitute a Misrepresentation
Hamilton v Allied Domecq
Except;
1. Failing to Disclose a Change in Circumstances that would Render a Previously True Statement False - With v O’Flanagan
2. Telling a Half-truth (only half the story) - Curtis v Chemical Cleaning and Dyeing C
3. Where there is an Obligation to Disclose Facts
Which Induces the Representee to Enter the Contract - There must be Reliance on the Representation / Statement - A Representee’s Failure to Verify the truth of a Statement made to them will Not Prevent a Misrepresentation Claim
Redgrave v Hurd
Unless;
1. The True Position was set out in the Final Contract - Peekay v Australia Banking Group
2. C is Experienced in the Area - Curits v Chemical Cleaning and Dyeing C
Effect of Misrepresentation
Makes a Contract Voidable (Affirm or Rescind)
Remedies for Misrepresentation - Rescission - Innocent Party Must Notify the other of the Intention to Rescind (a reasonable attempt my suffice)
Car and Universal Finance Co Ltd
Remedies for Misrepresentation - Bars to Rescission
- An Innocent Purchaser acquires an Interest in the Property before the Contract is Rescinded
- The Innocent Party Affirms the Contract (cannot later retract) - Long v Load
- There has been Undue Delay from the point at which the Misrepresentation Should Have Been Discovered (but where the Misrepresentation is Fraudulent, from the point at which the Misrepresentation was Actually Discovered) - Leaf v International Galleries
- It is Impossible Substantially to Restore Goods / Property to Other - Crystal Palace FC v Dowie
Remedies for Misrepresentation - On Rescission, Innocent Party may also claim an Indemnity for Expenses incurred from the Contract (but – Claims for Indemnity are very restricted and only cover the precise terms of contract)
Whittington v Seale-Hayne
Damage Fraudulent Misrepresentation / Non-Fraudulent - Usual Remoteness / Foreseeability rules do Not Apply
Can Recover damages for All Direct Consequences
Must prove the Statement was Made Knowingly, or Without Belief in its Truth, or Recklessly - Derek v Peek
N-F = s.2(1) Misrepresentation Act 1967
Defences
D must prove that he Had Reasonable Grounds to Believe, and Did Honestly Believe up to the Time the contract was Made, that the Facts were True
- Very difficult to prove (due to Objective and Subjective Elements) - Howard Marine v Ogden
