Vitiating Factors: Misrepresentation/Misleading or Deceptive Conduct

Question 1

What is a representation and how is it different to misrepresentation?

Answer 1

A representation is a statement by the representor that induces the other party (The representee) to contract.

A misrepresentaion is a false representation.

Question 2

What is the difference between a misreprensation of a term and a misrepresentation which is not a term?

Answer 2

If the statement is a term, and it is a misrepresentation, it is a breach of contract.

If it is not a term, but merely induces the formation of a contract, remedies will differ according to the nature of a misrepresention.

Question 3

What types of facts can an action based on misrepresentation be brought upon?

Answer 3

1. Existing fact
2. Past facts.
3. Not future facts.

(Given v Pryor (1979) 39 FLR 437)

Question 4

In relation to misrepresentation, damages are only available if which two types of torts are establish?

Answer 4

A tort of deceit of tort of negligence.

Question 5

What should not be taken seriously in a statement?

Answer 5

Puffery or opinions.

(Mitchell v Valherie [2005] SASC 350)

Question 6

A representor’s statement which is an opinion cannot be relied on unless

Answer 6

the representor is prepared to warrant it’s accuracy and give contractual force.

Question 7

In Pryor v Given (1980) ALR 189, the words “a wonderful place to live” were intended to be mere puffery, but amounted to a representation and statement of fact because … …

Answer 7

It implied to the party that the land was for urban use.

Question 8

When facts are equally known to both parties, and a statement is made from one party to other is …

Answer 8

An expression of opinion

(Smith v Land & House Property Corp (1884) 28 Ch D 7 )

Question 9

In Smith v Land & House Property Corp (1884) 28 Ch D 7, Lord Justice found SMITH statement to be what?

Answer 9

fraudument misrepresentation becase:

1. SMITH knew “Mr Fleck (most desirable tenant)” to be false.
2. SMITH was reckless and without care if the statement was true or not

Question 10

In Smith v Land & House Property Corp (1884) 28 Ch D 7 what remedies were decided?

Answer 10

Recession and damages.

Damages because there was a tort of deceit.

Question 11

How can statements about the future be misrepresentation?

Answer 11

It cannot. However, if it can be ascertained that there is a statement of existing fact of the person’s mind (intention) about the future, then there could be misrepresentation of fact.

(Edgington v Fitzmaurice (1885) 29 Ch D 459)

Question 12

How can statement of law be mispresentation?

Answer 12

Because a statement of law implies a representation that a representor knows the law, which is a statement of fact.

(Public Trustee v Taylor [1978] VR 289 )

This distiction between statements of fact and law is most likely aboslished because of Walton Stores v Maher

Question 13

What are the three catagoies of misrepresentation?

Answer 13

1. Innocent,
2. Fraudulent
3. Negligent

Question 14

Name two types of tort, relevant to misrepresentation and misleading and deceptive conduct, which will only allow a remedy of damages.

Answer 14

1. Tort of negligence
2. Tort of Deceit.

Question 15

False statement made in the honesty but mistaken belief that the representation was correct is what type of misrepresentation?

Answer 15

Innocent misrepresentation

Question 16

Statements knowing to be false is what type of misrepresentation?

Answer 16

Fraudulent misrepresentation.

(Derry v Peek (1889) 14 App Cas 337)

Question 17

Where the representor is

1. held out as a person of particular expertise,
2. then the representor realised or ought to have realised that advice was being trusted upon because of the representor’s expertise
3. Advice is incorrect due to negligence

is

(A) What type of mispresentation?

(B) What remedy is available?

(C) In which tort?

Answer 17

(A) Negligent misrepresentation

(B) Aggried party may recind the contract

(C) Aggrieved party may seek damages in tort of negligence.

(L Shaddock & Associated PL v Parramatta Council (1981) 150 CLR 25)

Question 18

What remedies are available to the aggrieved party in fraudulent misrepresentation?

Answer 18

1. Recission
2. Damages for a tort of deceit.

Question 19

Can the aggrieved party claim damages in tort of negligence or deciet in an innocent misrepresentation?

Answer 19

No. However, there may be relief for the aggrieved party to recind the contract.if the parties can be restored to pre-contractual positions.

Question 20

Which legislation, section, and subsection is the most relevant misleading and deceptive conduct?

Answer 20

Australian Consumer Law, Section 18(1)

Question 21

A contract can be rescinded for innocent misrepresentation even where the representee also had the chance to verify the false statement can be found in which case?

Answer 21

Redgrave v Hurd (1881) 20 Ch D 1

• “A man is not allowed to say … that when he made it he did not know it was to be false; he ought to have found out before he made it”
• “no man ought to seek to take advantage of his own false statements”
• If a man is induced to enter a contract by misrepresentation it is not sufficient answer “if you used due diligence you would have found out the statement was untrue.”