Misrepresentation (notes)

Question 1

structure

Answer 1

Definition
is it an untrue statement of fact
inducements
challenges with proving inducements
remedies
circumstances when right to rescind may be lost
categories of misrepresentation

Question 2

definition of misrep

Answer 2

an actionable misrepresentation is an untrue statement of fact which induces a person to enter a contract

Question 3

is it an untrue statement of fact

Answer 3

a - opinion
b - forecasts/statements of intention
c - trading puffery
d - statements of law
e - silence or non disclosure

Question 4

Opinion

Answer 4

an opinion which is genuinely believed cannot be misrepresented ed even if incorrect
has to be uninformed opinion
must not contradict other facts known
more likely to be opinion if giver is not better informed than receiver

Question 5

forecasts/statements of intention

Answer 5

statement of future intention not generally statement of true fact
unless the person has no such intention to perform the action in the future

Question 6

trading puffery

Answer 6

statement of fact does not include exaggerated advertising or vague boasts
court will decide if a reasonable person would take the statement seriously

Question 7

Statements of Law

Answer 7

In theory no-one can be misled as to what the law is because everyone is presumed to know the law.
However if the law is misrepresented (incorrectly) it is actionable.

Question 8

Silence or Non-disclosure

Answer 8

no legal obligation to disclose a material fact known to them, to the other party.
There are exceptions to the rule.
Representations by conduct
Deliberately concealing defects in goods
Half Truths

Question 9

inducements

Answer 9

the statement of fact must induce the party to enter the contract

Question 10

Challenges with proving inducement.

Answer 10

opportunity to discover the truth but fails to take it.
tests the accuracy but fails to discover truth.
asks a third party to test accuracy of statement but fails to discover the truth.
more than one inducement

Question 11

opportunity to discover

Answer 11

no duty to inspect
relying on representation
innocent misrepresentation

Question 12

tests accuracy

Answer 12

fraudulent = actionable
not fraudulent = not actionable, relying on own inspection so induced by that and not the seller

Question 13

multiple inducements

Answer 13

only one needed

Question 14

remedies

Answer 14

choice depends on category of misrep
rescission is restitution
not always possible to rescind contract

Question 15

circumstances where right to rescind may be lost (3)

Answer 15

innocent party affirms contract by indicating they wish to continue
restitution is not possible
lapse of time

Question 16

categories of misrep

Answer 16

fraudulent
common law negligent
MA negligent
wholly inncocent

Question 17

fraudulent misrep

Answer 17

‘false statement made knowingly or without belief in its truth’
state but dont use as remedy as other remedies under MA
Recovery of all direct loss from relying on the fraudulent misrepresentation regardless of foreseeability.
rescision/damages

Question 18

negligent under common law

Answer 18

this is a false statement made with no reasonable grounds for believing it to be true
provides for recovery of compensation for financial damage
includes precontractual negotiations

Question 19

negligent under MA

Answer 19

introduced negligent misrep
enacts category of wholly innocent misrep
supercedes common law remedy of fraudulent misrep
burden of proof reversed - defendant must prove grounds for believing
remedies same as if fraudulent

Question 19

special relationship

Answer 19

reliance on defendants specialist skill and judgment
reasonable expectation of knowledge by defendant, claimant relying on statement
reasonable to claimant to rely on defendant
assumption of responsibility on behalf of defendant

Question 19

wholly innocent misrep

Answer 19

s2(2)
‘false statement made by a person who at the time had reasonable grounds for believing it to be true’
common law - rescission only
MA rescission available but courts have discretion to award damages

Question 19

exemption/limitation clauses

Answer 19

s3
for misrepresentor to exclude liability must show clause satisfies test of reasonableness - misrep is averted