Misrepresentation and Mistake Cases

Question 1

What was the contract in Spice Girls v AWS?

Answer 1

○ Aprilia agreed to sponsor a world tour by the spice girls.
Aprilia would be entitled to
the right to sell a limited edition Spice Sonic scooter, access to the Spice Girls for one day to film a television commercial for the Spice Sonic scooter, the right to broadcast the commercial on MTV throughout Europe and the right to promote the Spice Sonic scooter in press advertising.

Question 2

What did Aprilia make in Italy?

Answer 2

Motorbikes.

Question 3

What did AWS have to pay?

Answer 3

£400,000 in three instalments, two were already paid.

Question 4

What did the group know when signing the contract?

Answer 4

The Spice Girls were aware that H was leaving to pursue another career. Aprilia was unaware of this.

Question 5

What did Aprilia do when discovering Halliwell was leaving?

Answer 5

Aprilia refused to pay either the third instalment or the advance against royalties.

Question 6

What did SGL claim for breach of contract?

Answer 6

£212, 500.

Question 7

What did Aprilia argue was a misrepresentation?

Answer 7

Induced into the contract based on the misrepresentation for the united front of the Spice Girls currently comprising the five members.

Question 8

What did Aprilia argue there was no evidence of?

Answer 8

The Spice Girls, outside of Italy, making sales prosper.

Question 9

Who won the case?

Answer 9

Aprilia.

Question 10

What was AWS entitled to?

Answer 10

Damages and to rescind the contract, no longer have to pay the third instalment.

Question 11

What was the judge Arden J wrong to have done?

Answer 11

To have ordered AWS to pay 10% of its own and SGL’s costs of the action.
In these circumstances we dismiss the appeal of SGL and allow the cross-appeal of AWS.

Question 12

What was the order in Spice Girls case?

Answer 12

Appeal dismissed with costs, cross-appeal allowed with costs.

Question 13

What rule derives from the Spice Girls case?

Answer 13

Once made, a representation has a continuing effect. If when it was continuing, the representor found it was now false, they have an obligation to correct it.

Also it was sufficient that the misrepresentation was a material inducement to enter into the contract, it did not have to be the only one.

Question 14

What was SGL liable to AWS under?

Answer 14

s.2(1) Misrepresentation Act 1967.

Question 15

What was the contract in Raffles v Wichelhaus?

Answer 15

• The claimant R offered to sell 125 bales of Surat cotton to the defendant W. This would be brought to Liverpool by a ship from Bombay, India.

Question 16

What was Liverpool the port for?

Answer 16

Importing raw cotton.

Question 17

What was the mistake in Raffles v Whichelhaus?

Answer 17

• There were two separate ships both called peelers, both sailed from Bombay and both carried cotton. One sailed in October, the other in December.

Question 18

Which ship did D believe would deliver the cotton?

Answer 18

The October ship.

Question 19

Which ship did C believe would deliver the cotton?

Answer 19

The December ship.

Question 20

What did D do when the cotton arrived in Liverpool in December?

Answer 20

W refused to take his cotton and pay for it because in his mind it was late.
-Claimant R sued the defendant W for breach of contract.

Question 21

What was the decision of the court in Raffles?

Answer 21

-The contract was not enforceable.
-No binding contract.
-Mutual mistake.

Question 22

What was the reason for the court’s decision in Raffles?

Answer 22

-They were talking in cross-purposes so never met an agreement.
-There was ambiguity about which ship both parties were referring to, a reasonable person would not be able to identify with certainty which ship was agreed upon.

Question 23

What was the contract in With v O’Flanagan?

Answer 23

A doctor was selling his house with its associated medical practice.

He reported he was receiving an annual £2000.

Question 24

How was there misrepresentation in Flanagan?

Answer 24

The statement of receiving £2000 was true when made, yet there was a long delay before the contract was signed.
The doctor became ill and the patients moved to other doctors. When the contract was signed Flanagan failed to mention how he was down to an average 5l per week.

Question 25

When were the claimants informed of the new circumstances in Flanagan?

Answer 25

After the contract was signed.

Question 26

What did the claimants want in Flanagan?

Answer 26

Recission on the basis of misrepresentation.

Question 27

What happened when Flanagan died?

Answer 27

The action by order of the Court continued against the personal representatives.

Question 28

What was the decision of the court in Flanagan?

Answer 28

The Claimants won and appeal was allowed.

Question 29

What is the rule from the Flanagnan case?

Answer 29

Once a statement was made inducing the contract, you become responsible for it, so if circumstances change which invalidate the statement, the other party must be informed of this.

Question 30

What was the contract in Bisset v Wilkinson?

Answer 30

Agreement to purchase to purchase two adjoining blocks of land at Avondale, in the Southern Island of New Zealand for sheep farming.

Question 31

Did anyone have experience of sheep farming in Bisset?

Answer 31

One of the Ds had no experience of farming but the other had, they carefully inspected the lands.

Question 32

Why did the Bisset contract go wrong?

Answer 32

When the Ds went into occupation farming they encountered difficulties.

They sought and obtained extensions on their payment to C, but when C requested the money under the agreement they had made, it wasn’t paid.

Question 33

What was the Ds defence in Bisset?

Answer 33

They wanted to rescind the contract and claim damages on the ground of the falseness of a statement as to the carrying capacity of the land for sheep.

Question 34

What did C want in Bisset?

Answer 34

To recover a sum of money payable to him under agreement for sale and purchase of land.

Question 35

What was the decision in Bisset?

Answer 35

The statement was merely of opinion which the vendor honestly held.

The Ds knew more than the C in this case, so Ds could not rely on the opinion of C as a fact.

Question 36

What is the rule in Courtier v Hastie?

Answer 36

There must be “an existing something to be sold and bought, and if sold and bought, then the benefit of insurance should go with it.”

Question 37

What was the rule in Esso Petroleum v Mardon?

Answer 37

‘Where a special relationship exists, a negligent mis-statement may be not only a breach of contractual warranty, but also an actionable tort as a breach of the duty of care which exists throughout pre-contractual negotiations and which survives the making of the ultimate contract.’

Question 38

What is the findings in Museprime Properties v Adhill Properties?

Answer 38

• The statement does not necessarily have to reasonably induce the other party.
• One view is that it must be objectively reasonable.
• The other view is that it must be satisfied on a balance of probabilities that the party was induced.

Question 39

What happened in Salt v Stratstones?

Answer 39

A car was brought by Salt from Stratstones as a brand new car, costing £21, 895. Several years later after trouble with the car, he discovered that it had been in an accident before it had been sold to him and subsequently repaired.

Question 40

What was the decision in Salt v Stratstones?

Answer 40

C was allowed to rescind and the objection that the car now had so many miles changed what he was returning. This would mean a discount on damages, however the court decided that this did not apply, rather treating the case as if the car had recently been brought.