Misrepresentation [Contract Law]

Question 1

What is the definition of Misrep?

Answer 1

‘a false, statement of material fact, made by one party to the other, which induces the contract’

Question 2

What is the first element to discuss?

Answer 2

Falseness

Question 3

What is the simple definition of false?

Answer 3

Something that is not true or accurate (With v O’Flanagan)

Question 4

What is the rule on silence?

Answer 4

Silence cannot be misrep, so if a party is not asked, then they may not be under a duty to tell (Fletcher v Krell).

Question 5

What are the four exceptions to the silence rule?

Answer 5

1. Half Truths:
   things that are not said that the person had a duty to disclose (Dimmock v Hallett)
2. Trust:
   if in a confidential relationship based on trust, the trusted party does not reveal something (Tate v Williamson)
3. Good Faith:
   in which all material facts must be disclosed whether asked or not (Lambert v Co-op Insurance)
4. Becomes:
   if a true statement becomes false and it is not corrected (With v O’Flanagan)

Question 6

How can a flase statement be made?

Answer 6

Verbally, by writing or behaviour (Spice Girls v Aprilia World Service)

Question 7

What is the second element to be discussed?

Answer 7

Material Fact

Question 8

What if the statement was of an Opinion?

Answer 8

Opinions are not statements of material facts and so cannot be misreps (Bisset v Wilkinson).

However, if the person stating the opinion is an expert or has a higher level of skill/knowledge, then the opinion will be a material fact (Smith v Land & House Property).

Question 9

What if the statement is of a Future Intention?

Answer 9

If a future intention is made at a time where the person aking it beleives it to be true, there can be no misrep.

But if the person stating the intention knows it is not true, then there can be a misrep (Edgington v Fitzmaurice).

Question 10

What is the third element to be discussed?

Answer 10

The statement must be made from one party of a contract, to another. An agent is seen to be an equivalent of a party.

Question 11

What is the fourth element to be discussed?

Answer 11

Whether the statement INDUCED the contract

Question 12

What are the two things to consider under ‘Induces’?

Answer 12

1. If you get your own survey done, you have not relied on a statement (Attwood v Small)
2. It is irrelevant if the person could have checked if the statement was true or not (Redgrave v Hurd)

Question 13

What is Innocent Misrep?

Answer 13

Under the Misrepresentation Act 1967, it is defined as

‘When your statement IS FALSE but you made it honestly, genuinely, believing it was true’

Question 14

What remedies are available for inncoent misrep?

Answer 14

Recession:
when parties are returned to their pre-contract position (not available if it is not possible, a party has decided to continue, there’s been a delay or a third party now as rights)

OR

Damages

Question 15

What is Negligent Misrep?

Answer 15

Under s2(1) Misrepresentation Act 1967, negligent misrep is a statement mad eby a person who had no reasonable grounds to believe it was true.

Question 16

What remedies are available for Negligent Misrep?

Answer 16

Recession:
when parties are returned to their pre-contract position (not available if it is not possible, a party has decided to continue, there’s been a delay or a third party now as rights)

AND / OR

Damages

Question 17

What is Fraudulent Misrep?

Answer 17

A statement made by someone who knows, or is reckless to the fact, that it is untrue (Greenridge Luton One v Kepton Investment).

Question 18

What remedies are available for Fraudulent Misrep?

Answer 18

Recession:
when parties are returned to their pre-contract position (not available if it is not possible, a party has decided to continue, there’s been a delay or a third party now as rights)

AND

Damages (including loss of profit (East v Maurer))