Misrepresentation and Misstatement Flashcards
Smith v Land and House Property Corporation
Although prima facie the plaintiffs’ statements concerning a tenant appeared to be an opinion, their expression involved the implied assertion of a factual basis for its making [of the contract]
Bisset v Wilkinson
Statements of opinion or belief - expressing an opinion or belief can not be actionable as misrep, it must have purported to be fact
Edgington v Fitzmaurice
Statements of future intention - this was fraudulent when claiming to do one thing with the money when it was actually used to pay creditor’s, however, it is difficult to extend this ratio beyond wilful lies, i.e. fraudulent misrep – generally statements of future conduct are not misrep
Pankhania v Hackney Borough Council
The HL in Kleinwort abolished the rule that a mistake of law is not actionable - applied here - difficult to distinguish though between misrep of law and misrep of fact cf. Solle v Butcher
Hands v Simpson Fawcett
Generally, silence cannot amount to misrep
Tapp v Lee
A statement which is half true may be actionable for misrep
Keates v The Earl of Cadogan
The D had not given any warranty or representation concerning the habitability of the house and it therefore did not amount to deceit - this fits well with Smith v Hughes and the oats
With v O’Flanagan
Where the D has done something that creates a positive impression in the mind of the other, and it is later rendered misleading in changing circumstances, this will amount to misrep - a representation continues until the conclusion of the contract
Dimmock v Hallett
Statements that are technically true can be misrep if they withhold information, or, what they imply is false
Spice Girls v Aprilia World Service
Conduct can have the same effect as Dimmock, even though what was represented was technically true, there was an implied assumption that all 5 members of the Spice Girls would be present and withholding Geri’s departure amounted to misrep
Museprime Properties v Adhill Properties
Where a representation is not material, it is suggested that the probative burden lies on the representee to show that he did in fact rely on it
Attwood v Small
Reliance - The buyers had relied on the statements made by their advisors, not the contracting party’s and it was therefore not actionable — materiality and reliance is the reasonable man test
Redgrave v Hurd
Even though documents were shown proving the P’s misrep, the D was under not duty to inspect them and was free to instead rely on the P’s representations, which were false - the rep were material and the D had relied upon it - NB contributory negligence now, however
Smith v Chadwick
If C was unaware of the misrep at the time of the contract or was aware but it can be proved that it clearly did not affect his judgment then no liability
Hedley Byrne & Co v Heller & Partners
Enlarged a duty of care when providing advice, which a party relies upon to its subsequent detriment, when a ‘special relationship’ occurs - unlike misrep statements of opinion, belief, etc can be negligent misstatements
Caparo v Dickman
No duty of care as it was foreseeable but there was insufficient proximity - negligent words are different from negligent actions and indeterminate liability needs to be avoided
Henderson v Merrett Syndicates
The HB principle applied to direct and indirect relationships - a disclaimer will avoid responsibility and an assumption of responsibility may well not be found where information or advice is given in informal circumstances
McCulllough v Lane Fox and Partners
Affirmed HB - there was a negligent misstatement but a disclaimer prevented the claim
Derry v Peek
Fraudulent misrep - the directors had honestly but mistakenly assumed that they would gain consent, this was reprehensible but not dishonest - Lord Herschell states that nothing short of proof of fraud will suffice - it must be knowingly made, or without belief in its truth, or recklessly as to its correctness
Doyle v Olby (Ironmongers)
Damages for fraudulent misrep - it is not merely to ‘make good the representation’ as this was not limited in representations made in deceit - the only limit on recovery is that the loss must be shown to have been caused by the fraudulently induced transaction – very high probative burden for fraudulent misrep
East v Maurer
Damages will be awarded for fraudulent misrep to represent the value of the hypothetical opportunity lost as a result of the plaintiff tying up money and time in the business instead of pursuing a different venture - damages will NOT be made for the profits which would have been made without the misrep - reliance loss not expectation loss
Howard Marine & Dredging Co v A Ogden & Sons
Hedley Byrne
Confirmation of negligent misrep - the duty passes, as soon as a misrepresentation is proved, to the representor to prove that he had reasonable ground to believe the facts he presented -
Test of remoteness is reasonable foreseeability
Royscot Trust v Rogerson
The loss pleaded by the finance company was not too remote - this was fraudulent misrep - negligent misrep was unlimited like fraudulent misrep
Gran Gelato v Richcliff
Contributory negligence means that damages for fraudulent misrep can be reduced under s2(1)
Whittington v Seale-Hayne
No damages for innocent misrep but an indemnity can be awarded for certain costs - loss of profits, value of stock lost, removal costs, medical expenses, rent and rates and cost of repairs ordered by council
Car and Universal Finance v Caldwell
Informal rescission of a contract (without court) - he had done this by calling the police and the AA, which was sufficient to rescind and prevent transfer of title to the car to the bona fide purchaser for value
William Sindall v Cambridgeshire CC
Factors for rescission - a. the importance in the overall contract, b. the loss that would be caused by the misrep should the contract be upheld and c. the loss which would be caused by the rescission - Lord Hoffman
Long v Lloyd
Vigers v Pike
- Affirmation - election or not
- Lapse of time - fraudulent (from fraud), non-f (from beg. of cont.)
- Third party rights - bona fide purchaser for value - no resci
- Restitution in integrum - major alteration of goods will mean that they cannot be returned - equitable jurisdiction to give money
Cremdean v Nash
In contrast with Overbrooke v Glencombe, the clause here claimed that they were not representations at, whereas in O v C, it merely limited responsibility for agents’ representations - that was okay
Contractual exclusions
Fraudulent misrep - principal’s liability for fraud cannot be excluded
Non-fraudulent misrep - exclusion must be reasonable cf. s3 MRA
Non-contractual exclusions
Negligent misstatement - disclaimer of responsibility may prevent a DOC arising
Non-fraudulent misrep - exclusion of negligence liability may be subject to section 2(2) of UCTA; exclusion of liability may go to materiality of the representation
