misrepresentation (Y13) Flashcards
Term
If breached, a party can claim for a breach of contract
Representation
If untrue, a party can claim for misrepresentation
Representation (in depth)
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
Misrepresentation (Law definition)
- An unambiguously false statement of fact or law
- Made to the party misled
- That induces them to enter into a contract
Bisset v Wilkinson POL
opinions/predictions will not be a misrep
Esso v Marden POL
opinions/predictions will not be a misrep. unless made by an expert
Fletcher v Krell POL
silence does not normally amount to a misrep. a person will not be responsible if they fail to disclose facts.
Spice Girls Ltd v Aprilia World Service BV 2000 POL
silence does not normally amount to a misrep. but conduct (non-verbal) may be
Dimmock v Hallet POL
silence does not normally amount to a misrep. but a half-truth (withholding some information) may be
With V O’Flanagan POL
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
Utmost good faith contract
• 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
Consumer Insurance Act 2012
• 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.
Party’s induced into the contract
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
Atwood v Small POL
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.
Museprime Properties LTD v Adhill Properties LTD POL
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
Innocent Misrepresentation
The party makes a false statement but has reasonable grounds to believe it to be true, and they genuinely believe it is
Negligent misrepresentation
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
Fraudulent misrepresentation
The party has made a deliberately false statement knowing that it is, or might be, untrue
What two types of damages can be awarded to 2 types of misrepresentation?
Rescission and damages
What is rescission?
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.
What are the awarded damages in misrepresentation?
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.
Misrepresentation Act 1967
Provides definitions / remedies (rescission, damages)
Exceptions to awarding rescission?
• 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
Misleading omissions
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
