Tort Law for International Finance

Question 1

What is a Representation?

Answer 1

A statement of fact made to induce another to contract, as viewed against the factual background.

Kyle Bay t/a Astons Nightclub v Underwriters subscribing under Policy No. 01957/08/01 [2007] EWCA Civ 57.

Question 2

What is a Term?

Answer 2

An provision forming part of a contract.

Question 3

What Factors are relevant to determining the Veracity of a Representation? (TIK)

Answer 3

1. Tming of the statement.
2. Importance of the statement.
3. Relative Knowledge of the Parties.

Question 4

What is a Misreprentation?

Answer 4

An untrue statement of law or fact that indues another to contract and results in them suffering a loss.

Question 5

Can a Representation be Implied?

Answer 5

Yes, but only if it is embedded within an express statement that a reasonable person would have drawn an inference from.

IFE Fund v Goldman Sachs International [2006] EWHC 2887.

Question 6

Are the Characteristics of a Recipient Relevant?

Answer 6

Yes, with respect to whether the recipient understood the statement as constructed and relied upon it as such.

Smith v Chadwick (1884) 9 App Cas 187.

Question 7

Must a Representation be Entirely Correct?

Answer 7

No, so long as it is substantially correct and the inaccuracies were unlikely to have induced the claimant to contract.

Avon Insurance Plc. v Swire Fraser Ltd. [2000] EWHC 230.

Question 8

Can a Statement of Opinion consitute a Misrepresentation?

Answer 8

Generally no, but this is a ultimately a factual matter for the court to adjudicate upon.

Springwell Navigation Corporation v JP Morgan Chase Bank [2010] EWCA Civ 1221.

Question 9

When can a Claimant be said to have Relied upon a Misrepresentation?

Answer 9

When it forms a real and substantial cause behind their decision to contract, as judged against what would have transpired in the statement’s absence.

Assicurazion Generali SpA v Arab Insurance Group (BSC) [2002] EWCA Civ 1642; Raiffeisen Zentralbank Osterreich AG v Royal Bank of Scotland Plc. [2010] EWHC 1392.

Question 10

What are the Three Types of Misrepresentation? (FIN)

Answer 10

1. Fraudulent.
2. Innocent.
3. Negligent.

Question 11

What is Fraudulent Misrepresentation?

Answer 11

Misrepresentation made either knowingly, without belief in its truth, or recklessly as to its truth.

Derry v Peek (1889) App Cas 337.

Question 12

What is Innocent Misrepresentation?

Answer 12

Misrepresentation made entirely without fault.

§2 Misrepresentation Act 1967

Question 13

What is Negligent Misrepresentation?

Answer 13

A statement made carelessly or without reasonable grounds for belief in its truth.

§2 Misrepresentation Act 1967

Question 14

Can Fraudlent Misrepresentation carry Criminal consequences?

Answer 14

Yes, if one is made with the intent to defraud another.

§2 Fraud Act 2006.

Question 15

What is Negligent Misstatement?

Answer 15

A statement made carelessly in circumstances where the maker owes a duty of care to the recipient.

Question 16

What is a Disclaimer?

Answer 16

A clear, well-drafted, and prominent exclusion of any assumption of liability for the outcome of information or advice provided.

Titan Steel Wheels v Royal Bank of Scotland Plc. [2010] EWHC 211.

Question 17

Is it possible to Preempt a Misrepresentation Claim?

Answer 17

Subject to the test of reasonableness, if a disclaimer is present, a claimant will be estopped from claiming any sort of misrepresentation.

§3 Misrepresentation Act 1967.

Question 18

What is Relevant to determining whether a Misrepresentation Disclaimer is indeed reasonable? (PED-CB)

Answer 18

1. Practical consequences of the decision on reasonableness.
2. Ease of access to alternative advice.
3. Difficulty of the undertaken task.
4. Claimant sophistication.
5. Bargaining power.

Springwell Navigation Corp v JP Morgan Chase Bank [2010] EWCA Civ 1221 (4). Smith v Eric S. Bush [1990] AC 831 (1, 2, 3, and 5).