Vitiating elements Flashcards
Doctrine of privity of contract
Under the doctrine of privity of contract, a contract can only create rights and obligations that bind those who are parties to the contract. (see Tweddle v Atkinson [1861] 25 JP 517). This is in keeping with the general principle that a contract is an agreement which is entered into freely by those who are party to it.
Under the doctrine of privity of contract, a contract can only create rights and obligations that bind those who are parties to the contract. (see Tweddle v Atkinson [1861] 25 JP 517). This is in keeping with the general principle that a contract is an agreement which is entered into freely by those who are party to it.
What are the elements misrepresentation
All actionable misrepresentation must include the following five elements
Unambiguous
false
statement of fact
addressed to claimant
induces claimant to enter contract
What are the two most common remedies granted for misrepresentation
Damages
Rescission
Three types of misrepresentation
Innocent - believed statement was true
Negligent - no reasonable grounds to believe was true
Fraudulent -knowing or recklessly false
What is the claimant’s general duty in misrepresentation
Duty to check any statements made by the defendant
NB. if the claimant does check and therefore relies on their own investigation, they cannot claim to have been induced - however they can claim inducement if they relied on the misrepresentation as well as their own investigation or where the representation was not their only inducement
What are the elements of fraudulent misrepresentation
In Derry v Peek:
A false representation must be proved to have been made:
- knowingly
- without any belief in its truth or
- recklessly
Note: motive is not relevant - only ‘but for’ test is
What are the elements of negligent misrepresentation
occurs where a party makes a statement carelessly or without reasonable grounds for believing its truth.
The burden of proof is on D to demonstrate that they had reasonable grounds for believing the statement was true
What is a negligent misstatement?
This is a common law action in tort based on case of Hedley Byrne v Heller
It covers a misrepresentation made carelessly and in breach of a duty owed by one party to the other to take reasonable care that the representation is accurate
a claim for it does not require a contractual relationship but there must be a ‘special relationship’ that is breaches, causing economic loss
Does require a contract
What are the elements of innocent misrepresentation
Representation will be innocent if the representor believed the statement was true and had reasonable grounds for believing in its truth
what is an exemption clause
Parties sometime seek to exclude the possibility of misrepresentation by including a non-reliance on representations clause in agreements
There is no certainty that this will successfully exclude liability
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