Vitiating factors- misrepresentation Flashcards
Define misrepresentation
A false statement made during the formation of a contract that induces a party to enter the contract
What are the 4 criteria for a misrepresentation
- wrongful party made false statement
- statement must relayed to material facts of contract
- statement must be made by party to contract
- statement must induce party to enter contract
Explain the 1st criteria of misrepresentation (wrongful party made false statement)
Can be verbal written or by conduct
Misrepresentation cant be made by silence
Misrepresentation must be ongoing and become false
Non disclosure of whole truth can be a misrepresentation when there’s a position of trust
Half truth is a misrepresentation
Whats the case for position of trust
Tate v Williamson
What’s the case for misrep must be ongoing and become false
With v Flanagan
Whats the case for silence cant amount to a misrep
Spice girls v Aprilia
Whats the case for half truth
Dimmock v hallett
Explain the 2nd criteria of misrepresentation (statement must relate to material facts of contract)
Statement of opinion/marketing gimmick/ statement of future intention= not statement of material fact
Whats the case for the 2nd criteria of misrep (statement must relate to material facts of contract)
Bissett v Wilkinson
Explain the 3rd criteria of misrep (statement must be made by party to contract)
3rd party inducing party to enter contract doesn’t make the original party accountable
Give an example for the 3rd criteria of misrep (statement must be made by party to contract)
Magazine presenting false info about product, individual purchase product, no claims can be made against the company of the product
Explain the 4th criteria of misrep (statement must induce party to enter contract)
If misrep is affirmed by 3rd independent party, the fact that c sought confirmation suggests the misrep didn’t induce the contract
What cases says that if confirmation is sought out, it means the party hasn’t been induced
Atwood v small
Redgrave v Hurd (statement must induce party to enter contract)
Not matter that c could have sought info that proved representation was false
What are the 3 types of misrepresentation
Innocent misrep
Negligent misrep
Fraudulent misrep
What is innocent misrepresentation
Where the party believes the info they have given to be true
What are the 4 things that make rescission unavailable in innocent misrepresentations
Return to original pre-contractural position not possible
Contract was affirmed
Delay
3rd party gained right over property
Explain what is meant by return to pre contractural position not possible
Party destroyed/disposed of property
Explain what is meant by contract affirmed, include a case
Suffering party continues with contract after becoming aware of the misrep (long v Lloyd)
Explain what is meant by delay, include a case
Delay between the contract and the complain may mean that party losses right to rescind contract (leaf v international galleries)
Explain what is meant by 3rd party gained right over property, include a case
Goods cant be returned to original party as it would be unfair on innocent 3rd party (Lewis v avery)
What are the remedies for innocent misrepresentation
Rescission- treat contract as if it hadn’t happened, return c to position before contract
What is negligent misrepresentation
Where the party has no reasonable grounds to believe statement they gave to be true, but the misrep wasn’t deliberate
For negligent misrep, what are the 2 places the c can make a claim under
Law of contract (s2(1) misrep act)
Law of negligence (hedley Byrne v heller)
