Types of Misrepresentation and Remedies Flashcards

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1
Q

What is innocent misrepresentation?

A

The person makes the false statement wholly honestly without negligence

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2
Q

What is negligent misrepresentation?

A

A false statement made by a person who believed the statement to be true but who had no reasonable grounds for believing the statement to be true

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3
Q

In what case was negligent misrepresentation established?

A

Hedley Byrne v Heller

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4
Q

What is the criteria for negligent misrepresentation in S.2(1) Misrepresentation Act 1967?

A
  • Misrepresentation
  • Results in a contract
  • V suffers a loss
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5
Q

What was held in Howard Marine v Ogden and Sons?

A

For negligent misrepresentation there must be reasonable grounds to believe the statement is true

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6
Q

What was held in Derry v Peek?

A

Fraudulent misstatement occurs when:
- D knows the statement is false
- D does not believe the truth of the statement
- D is reckless as to the truth of the statement

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7
Q

What is a fraudulent misrepresentation?
(Derry v Peek)

A

A person knowingly makes a false statement to induce a contract

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8
Q

What is a rescission?

A

An equitable remedy that aims to return the parties to the positions they were in before the contract was made

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9
Q

When is rescission not available?

A
  • Restitution is impossible
  • Contract has been affirmed
  • Delay
  • A third party has gained rights over a party
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10
Q

What was held in Clarke v Dickinson?

A

Rescission is impossible as partnership could not be returned

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11
Q

What was held in Long v Lloyd?

A

The claimant had affirmed the contract to buy a lorry as they used it when it was broken

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12
Q

What was held in Leaf v International Galleries?

A

Rescission was not available as a remedy due to a delay in finding out the truth

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13
Q

What was held in Lewis v Averary?

A

A third party had acquired possession of a fraudulently stolen vehicle

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14
Q

What is stated in S.2(2) Misrepresentation Act 1967?

A

Damages in lieu of rescission for negligent and innocent misrepresentation when rescission is not possible

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15
Q

What was held in East v Maurer?

A

Damages for a loss of profit may be recovered for fraudulent misrepresentation

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16
Q

What are the remedies for fraudulent misrepresentation?

A

The innocent party can rescind the contract and claim damages

17
Q

What are the remedies for negligent misrepresentation?

A

Section 2(1) Misrepresentation Act 1967 says that the same remedies are available as for fraudulent

18
Q

What are the remedies for innocent misrepresentation?

A

Recision or damages in lieu of recision but not both