PQ - BOC and Misrepresentation

Question 1

What is a misrepresentation?

Answer 1

1) A false statement of fact or law
2) made to the claimant
3) which induces her to enter the contract

Question 2

What is the difference between a statement of fact and law?

Answer 2

Fact: the statement can be made by words [Walters v Morgan] or by conduct [Spice Girls v Aprilia] - 4 members instead of 5 members of the group involved.

Law: Pankhania v Hackney LBC - consider if (1) the wording amounted to a misrepresentation and (2) if the C could action under such a claim

Question 3

What is considered not to be a statement of fact ?

Answer 3

1) A statement of honest opinion does not constitute a misrepresentation [Bisset v WIlkinson] - “1 team was enough for the agriculture work for a land of 2000 sheep.”

2) mere puffs - exaggerated advertisement claims
- Carlil v Carbolic Smoke Ball

3) statement of intention

Question 4

What are the exceptions for when an opinion is considered to be a misrepresentation?

Answer 4

1) The statement maker knew more than the tenants [Smith v Land and House Property Corp]
2) If the statement maker had special knowledge and experience such that care and skill was exercised in giving the opinion. [Esso Petroleum v Mardon] - wrong expert advice given about the profitability of the petrol kiosk

Question 5

What are omissions for misrepresentation?

Answer 5

1) Silence alone may will not amount to misrepresentation [Keates v Cadogan]

2) A half-truth may amount to misrepresentation
- Nottingham Patent Brick and Title Co v Butler
Solicitor has said he did not know of any restrictive covenants affecting the lanf under negotiation
- failed to ad that this was because he had not bothered to check

3) Change in circumstances can result in misrep
[With v O’Flanagan] - if the facts change, there is a duty to correct that representation

Question 6

Why is inducement to enter into the contract so important?

Answer 6

• Misrepresentation will only be actionable if the statement induced the contract

Question 7

What is the rule with regards to inducement?

Answer 7

1) the misrepresentation does not need to be the sole inducement, so long as it is an inducement. [Edington v Fitzmaurice]
2) But for the misrepresentation the C would not have entered into the contract [Arab Insurance]

Question 8

What can still be considered to have induced the contract?

Answer 8

1) When C did not verify the accuracy of the statement can still be considered a misrepresentation [Redgrave v Hurd]
2) When C Suspected the misrepresentation is untrue but still relied on it [Hayward v Zurich]

BUT
if D corrected the misrepresentation prior to reliance and brought to C’s attention, C cannot claim in misrep. [Peekay Intermark]

Question 9

What are the relevant remedies for misrepresentation?

Answer 9

1) Rescission

Can be barred if too late in bringing claim
Leaf v International Galleries - 5 years is too long a delay for a claim to be brought

2) Damages

S2(1) of Misrepresentation Act 1967

under s2(1), C only needs to establish the actionable misrepresenation

However, D will not be liable if he can prove that he
i) believed, or had reasonable grounds to believe that his statement was true

ii) up until the time of the contract

If C can claim under the MA 1967, then the damages will be recovered based on the tort measure ie the diff between what the item value is now and what C paid for it. [Royscott v Rogerson]

Question 10

What would making a claim under s2(1) be more advantageous?

Answer 10

• more advantageous than making a claim under fraudulent misrepresentation or common law
• claim under fraudulent misrepresentation requires proof of fraud [Derry v Perek] which is difficult to prove
• claim under common law requires proof of breach of duty of care