Misrepresentation and non-disclosure Flashcards
Misrepresentation
To establish misrepresentation, a false statement must be made from words or conduct (Spice girls v Aprilia World).
Suppression of facts
Conscious suppression of facts can amount to misrepresentation (Dimmock v Hallett (1866) and Schneider v Heath).
Change in facts
A change in facts after the initially (true) representation was made, upon becoming known to the misrepresentor, must be communicated to the other party or else it will become a misrepresentation (Davies v London and Provincial Marine Insruance [1878]).
Opinion as a misrepresentation
An opinion will not be misrepresentation unless dishonestly held (Bisset v Wilkinson). An opinion can be a misrepresentation if there are no reasonably grounds for that opinion (Smith v Land and House Property Corporation).
Promise as a misrepresentation
A promise can amount to a misrepresentation is they have no intention of keeping it (Edgington v Fitzmaurice [1885]).
Requirements of a misrepresentation
The misrepresentation must be made to the misled party (Peek v Gurney). This can be the public at large (Andrews v Mockford).
The misrepresentation must be an inducement to contract (Attwood v Small). The inducement can be inferred (Museprime v Adhill [1991]).
Opportunities for inspection to discover the misrepresentation do not affect chances of a remedy (Central Ry of Venezuela v Kish [1867]).
Fraudulent misrepresentation
Fraudulent misrepresentation renders the contract voidable, gives rise to damages and the innocent party can affirm or rescind the contract (Archer v Brown [1985]).
Negligent misrepresentation
Negligent misrepresentation allows the innocent party to rescind and award damages but the court can refuse this under s2 of the MA 1967. The innocent party chooses between affirming the contract and claiming damages in nelgignece or rescinding the contract and claim damages for losses which will remain.
Innocent misrepresentation
Innocent misrepresentation only allows the innocent party to rescind the contract. They can also claim indemnity. Court has discretion to refuse rescission and award damages instead.
Rescission
Rescission must be communicated to the other party (Scarf v Jardine [1882]) or goods may be retaken without buyer’s knowledge (Car and Universal Finance v Caldwell [1961]).
Right to rescission can be lost…
Right to rescission can be lost with affirmation (Long v Lloyd [1958]), lapse of time (Leaf v International Galleries [1950]), rights of third parties (Babcock v Lawson (1880)), or inability to make restitution (Clarke v Dickson (1858)).
Damages can be denied…
by s2(2) of the MA 1967; the courts look at the importance of the misrepresentation (Sindall v Cambridgeshire [1994]). The measure of damages is the loss caused by the misrepresentation, not the loss caused by entering into the contract (Sindall v Cambridgeshire [1994]).
Elements of a fraudulent misrepresentation claim
a fraudulent misrepresentation is made, the misrepresentor intended that someone should act on it and the misrepresentee acted on it to their detriment (Bradford Building Society v Borders [1941]). Fraud is made knowingly, without belief in its truth or reckless as to its truth (Derry v Peak [1990]). Damages are calculated using the tort measure, meaning all damages are recoverable even if not reasonably foreseen (Doyle v Olby [1969]).
Elements of a negligent misrepresentation claim
For negligent misrepresentation, a negligent claim can be made parallel to a contract in tort (Henderson v Merrett Syndicates [1995]) especially if the person has special skill or knowledge (Esso v Mardon [1976]). Under s2(1) of the MA 67 there is a statutory right to damages under negligence but the scope is narrower than duty of care in tort (Howard Marine Dredging v Ogden [1978]). It can only be used when a misrepresentation is made to that person.
Duty to disclose
There is no general duty to disclose information (Bell v Lever Bros [1932]).
