Misrepresentation (vitiating Factor)

Question 1

When is there misrepresentation

Answer 1

A false statement is made
Relates to a material fact
Made by a party to contract
Induces the other party to enter the contract

Question 2

A false statement is made

Answer 2

A false statement is made (usually verbal or written but can be action – see Spice Girls v Aprilia).
Silence cannot be misrep – Fletcher v Krell.
Except:
1.Once a statement is made a change in circs (making the statement untrue) prior to contract must be notified or will be a misrep. With v O’Flanagan
2.Half truth can be misrep – Dimmock v Hallett
3.Where parties’ relationship is based on trust – see Tate v Williamson
4Insurance contracts and other contracts “of utmost good faith” see Lambert v Co-operative Insurance Society.

Question 3

Relates to a material fact

Answer 3

Must not be an opinion (Bisset v Wilkinson) or
Future intention (Edgington v Fitzmaurice)

Question 4

Made by one party to another

Answer 4

Are there experts involved?
What knowledge does a party have?

Question 5

Types of misrep

Answer 5

Innocent
Fraudulent
Negligent

Question 6

Induces the other party to enter contract

Answer 6

Must be a critical part of their decision making. (Attwood v Small)
Doesn’t matter if they could have discovered the truth by taking reasonable steps or it was unreasonable to rely on the misrep. Redgrave v Hurd

Question 7

S.12 CRA 2015 –

Answer 7

pre-contractual information that must be given to the Consumer prior to the contract for supply of goods for it to become valid.
Any changes to this must be agreed expressly or will be a misrep.

Question 8

Consumer Protection (Amendment) Regs 2014

Answer 8

a misleading omission includes:
1.Not giving information needed to make an informed decision
2.Hides or provides material information in an unclear or untimely manner
3.Fails to identify the commercial intent of the commercial practice.

Question 9

Innocent misrep

Answer 9

Misrepresentation Act 1967 – A false statement, but one genuinely held on reasonable grounds.

Question 10

Negligent misrepresentation

Answer 10

a false statement made by a person who honestly believed the statement was true but had no reasonable grounds for believing it to be true.

Common Law tort of negligence – established in Hedley Byrne v Heller
S2(1) Misrep Act 1967 – must show:
misrep; results in contract; V suffers loss.
Then burden is on person making the statement to show there was reasonable grounds for making it

this is the opposite to the common law and makes the statute more favourable to the victim. Howard Marine v Ogden.

Question 11

Fraudulent misrepresentation

Answer 11

Comes from tort of deceit. See Derry v Peak.
Person making the representation knows it to be untrue, or is reckless as to whether it is untrue.
Greenridge Luton v Kempton – even overly optimistic view might be fraudulent.

Question 12

Remedies for innocent misrep

Answer 12

Recission – equitable remedy – parties returned to position prior to contract.

Not available if
Restitution to original position is impossible – Clarke v Dickson
The contract is affirmed – Long v Lloyd
Delay - Leaf v International Galleries
A third party has gained rights over property. – Lewis v Averay

Question 13

Remedies for negligent misrep

Answer 13

Recission and/ or Damages
Under Hedley Byrne Damages are calculated according to Tort principles.
Con Neg applies - Law Reform (Con Neg) Act 1943
See Royscot Trust Ltd v Rogerson

Question 14

Remedies for fraudulent misrep

Answer 14

Recission and damages in the tort of deceit. See Smith New Court v Scrimgoeur.
However, the court has used contractual damages to recover loss of profit. See East v Maurer.

Question 15

What is rescission

Answer 15

Rescission is a legal remedy that allows a party to cancel a contract and return the parties to the position they were in before the contract was made.