Misrepresentation & non-disclosure

Question 1

Definition of misrepresentation

Answer 1

A false statement of existin or past fact or law made by one party to a contract to another before or at the time of contracting on which that party later relied

Question 2

What is the first thing you must decide when a statement induced somebody to enter a contract

Answer 2

Whether it became a term of the contract or whether it was misrepresentation

Question 3

What is the test for whether a pre contractual representation became a term of the contract?

Answer 3

Heilbut Symons - an objective test as to the parties’ intentions

Question 4

What are the two car cases that show the difference in whether a statement can be objectively construed as being intended to be part of the contract

Answer 4

Oscar Chess and Dick Bentley. Oscar Chess: both parties were in as good a position as each other to know the age of the car - MISREPRESENTATION. Dick Bentley: Car dealer was in a better position to know how many miles the car had done - TERM. Test is superior / expert knowledge

Question 5

What are the 4 types of misrepresentation and what order should they be addressed in?

Answer 5

1. Fraudulent, 2. Common law megligent, 3. Statutory, 4. Innocent

Question 6

Case that shows that superior knowledge will impute that an opinion is fact

Answer 6

Smith v Land and Home Property “Mr F is a most desirable tenant”. See also Esso v Mardon

Question 7

A case where the statement maker was not an expert / no superior knowledge, so a statement of opinion was not capable of being construed as fact

Answer 7

Bissett v Wilkinson - “the farm will support 2000 sheep”

Question 8

A false statement of fact includes partial non-disclosure (half-truths)

Answer 8

Notts Patent Brick and Tile v Butler “I am not aware of any restrictive covenants” OR Dimmock v Hallett “all the farms on the land are rented”

Question 9

There is a duty to notify change of circumstances

Answer 9

With v O’Flanagan - doctor’s illness had rendered the surgery worthless

Question 10

A misrepresentation need not be the only iknducement to enter a contract, but must be a factor

Answer 10

Edrington v Fitzmaurice

Question 11

An (un-utilised) oportunity to discover that a misrepresentation was false is no bar to action for misrepresentation

Answer 11

Redgrave v Hurd

Question 12

A misrepresentation is operative when IN FACT it was relied upon. Whether the reasonable person woudl have relied upon it goes only to the burden of proof (so it doesn’t matter if you were stupid)

Answer 12

Mureprime Properties v Adhill Properties

Question 13

There is no general duty of good faith re pre contractual disclosure

Answer 13

Walford v Miles: concept of good faith “inherently repugnant” to the adversarial nature of contractual negoatiations. Sykes v Taylor-Rose: No need to disclose murder / presence of dismembered body parts in home

Question 14

What is the test for whether a misrepresentation is fraudulent and what case is it from?

Answer 14

Derry v Peek: If the statement was made 1. Knowingly OR 2. Without belief in its truth. OR 3. Recklessly (careless as to its truth)

Question 15

What is the measure of damages for farudulent misrepresentation (and the case which established that)

Answer 15

Doyle v Olby: All damages flowing from the deceit

Question 16

What is the test for common law negligent misstatement

Answer 16

Hedley Byrne: Special relationship, reasonable reliance, assumption of responsibility

Question 17

What are the conditions for a claim of misperresentation under the Misrepresentation Act 1967

Answer 17

The plaintiff entered into a contract as a result of misrepresentation by the other party AND suffered loss

Question 18

What is the defence under the Misrepresentation Act 1967

Answer 18

The maker of the statement had reasonable grounds to believe its truth

Question 19

Whi is the burden of proof on under the Misrepresentation Act 1967

Answer 19

The burden is on the defendant to show that they had reasonable grounds for belief in the truth of the statement

Question 20

What case shows that the test for whether a defendant had reasonable grounds for belief under the Misrepresentation Act 1967 is a strict one

Answer 20

Howard Marine v Ogden - consultation of LLoyds register when he could have gone to the source was not reasonable grounds

Question 21

What is the measure of damage/remotenesss for statutory misrepresentation (and authority)

Answer 21

Tortious measure: Royscott Trust v Rogerson - all direct loss regardless of forseeability

Question 22

When is a misrepresentation innocent

Answer 22

When it’s not fraudulent, stattutory or common law negligent misstatement

Question 23

What remedy is available for innocent misrepresentation

Answer 23

Rescission OR damages in lieu of rescission, under S2(2) pf the Misrepresentation Act 1967