Misrepresentations Flashcards
What is a misrepresentation?
A false statement that causes a party to enter into a contract
What is required for a misrepresentation to be actionable?
The misrepresentation must be a false statement of existing fact or law, and it must have induced the party to enter into the contract.
Is a statement of opinion usually a misrepresentation? Which case supports this?
Generally, no. However, it can be a misrepresentation if the speaker knows the opinion cannot be sustained or does not believe it at the time (Smith v Land & House).
What is the effect of silence on misrepresentation? Which case supports this?
Keeping silent when a statement is true but later becomes false can constitute misrepresentation (With v O’Flanagan)
What must a representation be for it to be actionable as a misrepresentation?
- The representation must be false.
- It must be of fact (not opinion or intention).
- It must be made to the person misled and intended to be acted upon.
What is required for a misrepresentation to be considered material? Which case supports this?
The misrepresentation must induce the party to enter the contract. It does not have to be the sole reason, but it must play a real and substantial part in the decision (Redgrave v Hurd).
What is a fraudulent misrepresentation?
A fraudulent misrepresentation occurs when the maker knows the statement is false or makes it recklessly without caring if it is true or false. It is actionable under the tort of deceit and can be a gateway to criminal charges, therefore carries a higher burden of proof
What is an innocent misrepresentation?
An innocent misrepresentation is when the maker genuinely believes the statement is true and does not act negligently in making it.
What is a negligent misrepresentation?
A negligent misrepresentation occurs when the maker fails to take reasonable care in making the statement. It arises when there is a “special relationship” giving rise to a duty of care.
What case established the principle of negligent misrepresentation?
Hedley Byrne v Heller (1964) established that if someone with special skill gives advice or information, they owe a duty of care, and failure to take reasonable care can lead to negligent misrepresentation.
What case is often cited when discussing fraudulent misrepresentation and loss suffered due to false statements made intentionally?
Derry v Peek (1889):
The House of Lords held that a fraudulent misrepresentation occurs when a party knowingly makes a false statement, and the injured party can seek damages as a result of the deceit.
What case illustrates innocent misrepresentation in the context of loss caused by a statement made in good faith?
Whittington v Seal Hayne (1900):
The case involved an innocent misrepresentation where the statement was made without negligence or fraudulent intent, and the claimant suffered a loss.
What steps are involved in testing for whether a misrepresentation has occurred?
- Must be an intention to contract/deliver a contractual term
- Importance of the statement, relative knowledge of the parties
- If it’s not actionable as a misrep its a rep. no damahes can be given
What makes a misrepresentation actionable?
- Must be false
- Must be of fact, not opinion
- Must be one of fact, not intention
- A statement of law is now actionable
- Must be addressed to the misled party
- Must be intended to be acted upon
- Must induce the contract and be intended to be acted upon
Which case supports that a misrepresentation must be one of fact, not of opinion?
Bisset v Wilkinson 1927
“If a reasonable man with the vendors knowledge could have come to the conclusion he stated, the description of that conclusion as an opinion would not necessarily protect him against recission for misrepresentation”
Which case supports that a misrepresentation must be one of fact, not intention?
Edgington v Fitzmaurice 1885
- Case clarifies that an honestly held intention that fails to materialise is different from a dishonestly stated intention
Which case supports that a misrepresentation of law is NOW ACTIONABLE?
Pankhania v Hackney London Borough Council
Mneumonic to remember the criteria for a misrepresentation to be actionable
Five Fine Lawyers Address Intentions And Inducements
Which case supports that a misrepresentation must induce the contract performance?
Smith v Chadwick
- Did not allow the statement to affect their judgement
Dimmock v Hallett 1866
- A contract may be avoided where one party to a contract makes a false statement of fact which induces the other party to enter the contract
When does an opinion become actionable
Smith v Trees , one party has greater knowledge
Esso Petroleum - expert knowledge
