Misrepresentation & non-disclosure Flashcards
Definition of misrepresentation
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
What is the first thing you must decide when a statement induced somebody to enter a contract
Whether it became a term of the contract or whether it was misrepresentation
What is the test for whether a pre contractual representation became a term of the contract?
Heilbut Symons - an objective test as to the parties’ intentions
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
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
What are the 4 types of misrepresentation and what order should they be addressed in?
- Fraudulent, 2. Common law megligent, 3. Statutory, 4. Innocent
Case that shows that superior knowledge will impute that an opinion is fact
Smith v Land and Home Property “Mr F is a most desirable tenant”. See also Esso v Mardon
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
Bissett v Wilkinson - “the farm will support 2000 sheep”
A false statement of fact includes partial non-disclosure (half-truths)
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”
There is a duty to notify change of circumstances
With v O’Flanagan - doctor’s illness had rendered the surgery worthless
A misrepresentation need not be the only iknducement to enter a contract, but must be a factor
Edrington v Fitzmaurice
An (un-utilised) oportunity to discover that a misrepresentation was false is no bar to action for misrepresentation
Redgrave v Hurd
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)
Mureprime Properties v Adhill Properties
There is no general duty of good faith re pre contractual disclosure
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
What is the test for whether a misrepresentation is fraudulent and what case is it from?
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)
What is the measure of damages for farudulent misrepresentation (and the case which established that)
Doyle v Olby: All damages flowing from the deceit
What is the test for common law negligent misstatement
Hedley Byrne: Special relationship, reasonable reliance, assumption of responsibility
What are the conditions for a claim of misperresentation under the Misrepresentation Act 1967
The plaintiff entered into a contract as a result of misrepresentation by the other party AND suffered loss
What is the defence under the Misrepresentation Act 1967
The maker of the statement had reasonable grounds to believe its truth
Whi is the burden of proof on under the Misrepresentation Act 1967
The burden is on the defendant to show that they had reasonable grounds for belief in the truth of the statement
What case shows that the test for whether a defendant had reasonable grounds for belief under the Misrepresentation Act 1967 is a strict one
Howard Marine v Ogden - consultation of LLoyds register when he could have gone to the source was not reasonable grounds
What is the measure of damage/remotenesss for statutory misrepresentation (and authority)
Tortious measure: Royscott Trust v Rogerson - all direct loss regardless of forseeability
When is a misrepresentation innocent
When it’s not fraudulent, stattutory or common law negligent misstatement
What remedy is available for innocent misrepresentation
Rescission OR damages in lieu of rescission, under S2(2) pf the Misrepresentation Act 1967
