Vitiating factors - misrepresentation Flashcards
Element 1
Must be a false statement
False statement doesn’t need to be written or verbal it can be a picture
Spice girls v Aprilia
Spice girls v Aprilia world service
Appearance in photographs were together even though they knew a member was leaving the group. This was a misrepresentation as it was a false statement.
Silence can not be a false statement
Fletcher v Krell
Fletcher v Krell
Silence was not a false statement so this was not a misrepresentation
Exceptions to the silence rule
- Where circumstances change - keeping silent can be a misrepresentation
- A half truth - being economical with the truth
- Relationship between parties is based on trust
- In Uberrimae Fidei contracts
Where circumstances change
With v O’Flannagan
With v O’Flannagan
Should’ve told the purchaser of the change of situation
A half truth
Dimmock v Hallet
Dimmock v Hallet
A part truth about tenants on a land was a misrepresentation
Parties are in a position of trust
Tate v Williamson
Tate v Williamson
Breach of trust by a financial adviser was a misrepresentation
Uberrimae fidei contracts
Lambert v Co-Operative Insurance
Lambert v Co-operative Insurance
Silence about the criminal conviction of her husband was a misrepresentation. Company was entitled to make the policy void and refuse to pay claim.
Element 2
Must be a statement of material fact
Must be a statement of material fact
Bissett v Wilkinson
Bissett v Wilkinson
Genuinely believed his opinion on sheep in the farm to be accurate, so it was not a misrepresentation.
Element 3
It must have been made by someone, who was a party to the contract
Element 4
It must have induced the other party to enter the contract
Must have induced the other party to enter the contract
Attwood v Small
Attwood v Small
No misrepresentation as the purchaser relied on the survey report and not the sellers statement
The point can still be proved even if C could reasonably have checked to see if the statement was true
Redgrave v Hurd
Redgrave v Hurd
Was entitled to rely on the sellers state more and because this was untrue, this was a misrepresentation
Misrepresentation to consumers
Consumer Protection Regulations 2014
Consumer Protection Regulations 2014
Information given to a consumer will be treated as a misleading omission:
- When it omits material information that the average consumer needs, according to the context, to make an informed, transactional decision.
- Hides or provides material. Information in an unfair, unintelligible, ambiguous and untimely manner.
- Fails to identify the commercial intent of the commercial practice if this is not already clear from the context.
Types of misrepresenation
- Innocent misrepresentation
- Negligent misrepresentation
- Fraudulent misrepresentation
Named in Misrepresentation Act 1967
Innocent misrepresentation
A representation which is genuinely held on reasonable grounds. This is a false statement made honestly and no element of negligence in that belief.
Remedies available is rescission or damages
Negligent misrepresentation
False statement made by someone who believed the statement to be true but had no reasonable grounds to believe it to be true.
Howard Marine v Ogden
Remedies: Rescission AND/OR Damages
Howard Marine v Ogden
Had no registration document of dredges so no reasonable to believe the statement to be true
Fraudulent misrepresentation
Person making the statement induces the contract by making a statement that they know is untrue, or is reckless at to whether or not it is true.
Greenridge v Kempton
Remedies: Rescission or damages, and in some circumstances damages in the tort of deceit may be appropriate
Greenridge v Kempton
Untrue representation made recklessly or fraudulently by the seller so buyer was entitled to damages
What is rescission?
Puts parties back into their original position
Examples where courts will not use rescission
- Restitution to pre-contract is impossible
- Contract is affirmed
- Delay
- Third party has gained rights
Restitution to pre-contract is impossible
Clarke v Dickinson
Clarke v Dickinson
Rescission was not possible as they could not return the partnership
Claimant has affirmed the contract
Long v Lloyd
Long v Lloyd
Court refused because by persevering with the contract, indicated willingness to continue
Delay
Leaf v International Galleries
Leaf v International Galleries
Rescission was not allowed because of the 5 year delay in bringing the claim
Third party has gained rights to the property
Lewis v Avery
Lewis v Avery
Claim for rescission failed, would be unfair to deceptive third party of the purchased car.
