misrepresentation (Y13)

Question 1

Term

Answer 1

If breached, a party can claim for a breach of contract

Question 2

Representation

Answer 2

If untrue, a party can claim for misrepresentation

Question 3

Representation (in depth)

Answer 3

A statement made to encourage the other party to enter into a contract. It is not a part of the contract but the other party may sue if it is found to be false

Question 4

Misrepresentation (Law definition)

Answer 4

1. An unambiguously false statement of fact or law
2. Made to the party misled
3. That induces them to enter into a contract

Question 5

Bisset v Wilkinson POL

Answer 5

opinions/predictions will not be a misrep

Question 6

Esso v Marden POL

Answer 6

opinions/predictions will not be a misrep. unless made by an expert

Question 7

Fletcher v Krell POL

Answer 7

silence does not normally amount to a misrep. a person will not be responsible if they fail to disclose facts.

Question 8

Spice Girls Ltd v Aprilia World Service BV 2000 POL

Answer 8

silence does not normally amount to a misrep. but conduct (non-verbal) may be

Question 9

Dimmock v Hallet POL

Answer 9

silence does not normally amount to a misrep. but a half-truth (withholding some information) may be

Question 10

With V O’Flanagan POL

Answer 10

silence does not normally amount to a misrep. but it may be if there has been a change in circumstances. A significant change in circumstance before the contract is completed, but after the representation was made, must be communicated

Question 11

Utmost good faith contract

Answer 11

• A contracts is one of ‘utmost good faith’ is usually an insurance contract
• ALL material facts MUST be disclosed, whether asked or not – duty of FULL
disclosure

Question 12

Consumer Insurance Act 2012

Answer 12

• imposes a duty on the consumer to answer the insurers questions honestly and reasonably
• this means consumers who innocently fail to disclose a material fact if asked will not be found to have made a misrep.

Question 13

Party’s induced into the contract

Answer 13

ask if the representation made BEFORE the contract was finalised played a ‘real and substantial’ part in the party’s decision to enter into it
• If they were unaware of the representation- (didn’t hear it, etc), or knew about it but thought it was false, then the representation COULD NOT have induced them to enter into the contract
• If the party knew about the representation and then made their own checks, then the representation COULD NOT have induced them to enter into the contract as they clearly did not rely on it

Question 14

Atwood v Small POL

Answer 14

The buyer’s carried out their own surveys to confirm the value
of minerals in the mine they were buying. The buyer’s surveyor carried out the work negligently and gave them a misleading figure.

Question 15

Museprime Properties LTD v Adhill Properties LTD POL

Answer 15

It does not matter that the ‘reasonable man’ would have carried out their own checks on representations made, if the party relied on the representations then they relied on them, and that is sufficient to find there has been a misrep. if they later turn out to be false

Question 16

Innocent Misrepresentation

Answer 16

The party makes a false statement but has reasonable grounds to believe it to be true, and they genuinely believe it is

Question 17

Negligent misrepresentation

Answer 17

The party making the statement is not completely innocent as they did not reasonably believe it to be true, but they are not fully aware that it is a lie, so they are not fraudulent

Question 18

Fraudulent misrepresentation

Answer 18

The party has made a deliberately false statement knowing that it is, or might be, untrue

Question 19

What two types of damages can be awarded to 2 types of misrepresentation?

Answer 19

Rescission and damages

Question 20

What is rescission?

Answer 20

treats the contract as if it had never existed; puts the parties back in the position they would have been in if they had never entered into the contract.

Question 21

What are the awarded damages in misrepresentation?

Answer 21

determined by the court. If ONLY damages are awarded, and not rescission, the contract carries on. If rescission is no longer possible, court will award damages.

Question 22

Misrepresentation Act 1967

Answer 22

Provides definitions / remedies (rescission, damages)

Question 23

Exceptions to awarding rescission?

Answer 23

• Delay = Long period of time between completion of the contract and the claim for misrep: Leaf v International Galleries (1950) – 5 years
• Affirmation = innocent party decides to carry on with the contract once they are aware of the misrep.: Long v Lloyd
• 3rd party rights = in the time between the misrep. being discovered and the claim made, someone else has acquired rights in the property = Lewis v Averay
• Rescission is impossible = Clarke v Dickinson

Question 24

Misleading omissions

Answer 24

No general duty on a seller to disclose relevant information

BUT: Consumer Rights Act 2015: traders must provide certain information to consumers before a contract is binding, and if that information changes it must be brought to their attention and expressly agreed to