Misrepresentation

Question 1

Term

Answer 1

A part of the contract which if untrue Provides a Remedy for Breach of Contract

Question 2

Representation

Answer 2

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

Question 3

Mere Sales Puff

Answer 3

An Obviously Extravagant claim providing No Right of Action

Question 4

Statement is More Likely to be a Term if - The Party making the statement has Greater Skill / Knowledge than the Recipient

Answer 4

Dick Bentley Ltd v Harold Smith

Question 5

Statement is More Likely to be a Term if - The statement is of Vital Importance to the contract

Answer 5

Bannerman v White

Question 6

Statement is More Likely to be a Term if - Maker of the statement Tells the other Not to Bother Checking It Out

Answer 6

Schawel v Reade

Question 7

Statement is More Likely to be a Representation if - The Recipient of the statement has Greater Skill / Knowledge (Private Individual v Car Dealership)

Answer 7

Oscar Chess v Williams

Question 8

Statement is More Likely to be a Representation if - There was a Long Time Lapse Between the Statement and the Contract

Answer 8

Routledge v McKay

Question 9

Statement is More Likely to be a Representation if - The Maker of the statement asks the Recipient to Verify it

Answer 9

Ecay v Godfrey

Question 10

Statement is More Likely to be a Representation if - The statement is Oral and Not Repeated in the Written Contract

Answer 10

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

Question 11

If Statement is a Representation – Consider Misrepresentation

Answer 11

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

Question 12

Misrepresentation - ‘False Statement of Fact’ [oral / in writing / by conduct] - Statement must be one of Fact Not Opinion

Answer 12

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

Question 13

Misrepresentation - ‘False Statement of Fact’ [oral / in writing / by conduct] - A Misrepresentation can be made by Conduct

Answer 13

Spice Girls v Aprilia

Question 14

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

Answer 14

Edgington v Fitzmaurice

Question 15

Misrepresentation - ‘False Statement of Fact’ [oral / in writing / by conduct] - Silence does Not Constitute a Misrepresentation

Answer 15

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

Question 16

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

Answer 16

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

Question 17

Effect of Misrepresentation

Answer 17

Makes a Contract Voidable (Affirm or Rescind)

Question 18

Remedies for Misrepresentation - Rescission - Innocent Party Must Notify the other of the Intention to Rescind (a reasonable attempt my suffice)

Answer 18

Car and Universal Finance Co Ltd

Question 19

Remedies for Misrepresentation - Bars to Rescission

Answer 19

1. An Innocent Purchaser acquires an Interest in the Property before the Contract is Rescinded
2. The Innocent Party Affirms the Contract (cannot later retract) - Long v Load
3. 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
4. It is Impossible Substantially to Restore Goods / Property to Other - Crystal Palace FC v Dowie

Question 20

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)

Answer 20

Whittington v Seale-Hayne

Question 21

Damage Fraudulent Misrepresentation / Non-Fraudulent - Usual Remoteness / Foreseeability rules do Not Apply

Answer 21

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

Question 22

Defences

Answer 22

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