Revision Book

Question 1

What statements might not be seen as a statement of material fact?

Answer 1

Opinion
Sales talk
Statements of future intention or conduct
Statements of law

Question 2

Is a false statement of opinion a misrepresentation as to fact?

Answer 2

No (Bissett v Wilkinson - sheep, farmer had no experience of sheep which other party knew).

Question 3

What if someone gives their opinion when they have specialist knowledge or skill?

Answer 3

It may be considered as being an implied representation of fact, therefore being capable of a misrepresentation (Smith).

Question 4

Can sales talk amount to a misrepresentation?

Answer 4

No they are idle boasts (Dimmock - fertile land).

Question 5

Can statements of future intent be a misrepresentation of fact?

Answer 5

No, future intention is mere speculation unless it falsely represents the actual intention (it is a wilful lie)(Eddington - shares for paying off business not future growth).

Question 6

Can a statement of law be a misrepresentation as to fact?

Answer 6

Normally no as everyone knows the law but sometimes fact and law are not clear cut (Solle - converted flats). However in Pankhania there was a misrepresentation of law when they described a property for sale subject to licence when it was in fact a lease.

Question 7

Can non disclosure of information and silence amount to a misrepresentation of fact?

Answer 7

There is no duty to disclose material facts to the other party (Keates - house in disrepair) unless it is a contract of utmost good faith, change in circumstances, half truths and where there is a fiduciary relationship.

Question 8

What is a contract of good faith?

Answer 8

In these types of contracts there is a duty to disclose all material facts where one party is in a stronger position of knowing the truth than the other, for example contracts of insurance.

Question 9

What is a change in circumstances with regards to the exception to the general rule of silence not amounting to a misrepresentation?

Answer 9

This is where a statement was true when it was made but became false by the time the contract was made (With v O’Flanagan).

Question 10

What is a half truth in misrepresentation?

Answer 10

Where a statement does not represent the whole truth, then it is a misrepresentation (Notts Patent Brick & Tile Co - solicitor said no restrictive covenants but he had failed to check).

Question 11

Why can a fiduciary relationship be a cause for misrepresentation?

Answer 11

The fiduciary relationship imposes a duty of disclosure. Example, doctor patient, solicitor client.

Question 12

How can you have a misrepresentation by conduct?

Answer 12

By your actions rather than orally or written. Spice Girls - all 5 members took part in the commercial suggesting they would continue working together.

Question 13

In a problem question, what do you think would happen if the impression given is false when looking at the facts in the question (Spice Girls for example)?

Answer 13

It may amount to a misrepresentation by conduct.

Question 14

Can a misrepresentation be made after the contract is formed?

Answer 14

No, it must be made before (Roscorla).

Question 15

What is inducement into the contract?

Answer 15

The claimant must have relied on or been induced to enter the contract by the false statement of fact. They must have:
Known of the statement (Horsefall - unaware of defect in gun when purchased)
Relied on the statement which induced him to enter the contract (Attwood - told incorrect facts of mine but had independent people check therefore they did not rely on defendant)

Question 16

What are the types of misrepresentation?

Answer 16

Innocent (s2(1) of misrepresentation act)
Negligent (Hedley Byrne)
Fraudulent (Derry v Peek)

Question 17

What do we look at when considering fraudulent misrepresentation?

Answer 17

If it is an honest belief or not, motive is irrelevant (Akerhielm).

Question 18

What actions are available for negligent misrepresentation?

Answer 18

Available at common law and statute.

Question 19

What is the remedy for negligent misrepresentation at common law?

Answer 19

Rescission and/or damages may be recoverable for financial loss (Hedley Byrne) if the D carelessly made a false statement and it is reasonable to assume that statement will be relied upon and there is a special relationship between the parties (Esso v Marden).

Question 20

In an exam question if it mentions a special skill someone has, example accountant, or they are acting in a way that they give the impression they have a specialist skill what should you consider?

Answer 20

Negligent misrepresentation.

Question 21

When should you consider negligent misrepresentation under statute?

Answer 21

Where there is a contract and an action under the Hedley Byrne principle might not be straight forward as it is the D who has to prove he had a continuing honest belief in his statement.

Question 22

What are the key differences between common law and statute for negligent misrepresentation?

Answer 22

Common law: Statute:
Burden of proof on C Burden of proof on D
No contract required Contract required
Special relationship required No special relationship required

Question 23

What is innocent misrepresentation?

Answer 23

A statement which is made in the belief that it is true and there are reasonable grounds for that belief.

Question 24

What is the remedy for innocent misrepresentation?

Answer 24

Rescission or damages.

Question 25

What is the remedy for fraudulent misrepresentation?

Answer 25

Rescission and/or damages.

Question 26

What does rescission of the contract do?

Answer 26

It puts the parties in the position they would have been had the contract not existed but there are limitations to this.

Question 27

What are the limitations on the availability of rescission of a contract?

Answer 27

Affirmation (if C expresses they intend to continue omits implied from their conduct (Long v Lloyd))
Lapse of time (where there has been too long a lapse of time before rescission is sought)
Rights of third parties (if goods are obtained by misrepresentation and sold in good faith to a third party (White))
Impossible to restore parties to original positions (precise restoration is not required as long as substantial restoration is possible (Head))
Damages in lieu of rescission is a better remedy (s2(2) misrepresentation act 1967)

Question 28

What damages can you claim for fraudulent misrepresentation?

Answer 28

It is the out of pocket financial loss (McConnel) as well as loss of profits that resulted from the reliance on the misrepresentation (East).

Question 29

What damages can you claim for negligent misrepresentation?

Answer 29

You can claim under the Hedley Byrne principle for reasonably foreseeable losses or under s2(1) misrepresentation act 196 if there is a contract (these are the same as fraudulent misrepresentation damages - Royscot Trust).

Question 30

What is specific performance?

Answer 30

Where the court orders parties to continue with the contract as it is set out even it would save the mistaken party from a bad bargain (Tamplin - purchase of a lot thought to include gardens, plans were available to view at the time of purchase, ordered to proceed with sale).

Question 31

What is the definition of an actionable misrepresentation?

Answer 31

A statement of material fact made prior to the contract by one party to the other which is false or misleading and induced the other party to enter the contract.