Vitiating Factors (Paper 3-Section B Topic 6) Flashcards by Emilia Malkiewicz

What is a representation?

Statements which influence the decision whether to enter a contract or not

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Define a misrepresentation

A misrepresentation is a false statement of material fact made by a party to a contract which induces the other party to enter a contract

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Define recission

Good reason for the party to end the contract-other party has misled the other and they realise in agreement

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Define repudiation

A party to the agreement makes it clear they are not going to complete their side of the agreement

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What does the Misrepresentation Act 1967 state in the into?

If the statement proved to be untrue, the C has no right to claim

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The false statement must be what?

Untrue/Inaccurate

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Give the held of: Gordan v Selico

Painting over dry rot before selling a property fulfilled the elements of misrep.

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Give the held of: Fletcher v Krell

Wasn’t misrep. as she had no duty to disclose her material status

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Give the held of: With v O’Flanagan

Failure to disclose any change before acceptance is misrep.

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When can silence be misrep?

When it is a half truth
When parties relationship is based on trust

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Give the held of: Dimmock v Hallet

This part-truth was misrep

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Give the held of: Tate v Williamson

This was a breech of trust so was misrep

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The Consumer Insurance (Disclosure and Representations) Act 2012 states what?

If contract is mode of ‘utmost good faith’ all material facts must be disclosed even if they aren’t asked for

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Give the held of: Lambert v Co-Operative Insurance

The insurance company had the right to refuse to pay

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Give the held of: Spice Girls v Aprilia

When they all attended they represented that non of them were intending on leaving-this was misrep

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Give the held of: Bisset v Wilkinson

This was not misrep-it was an opinion.

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How is material fact tested?

A reasonable person would have entered a contract

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Give the held of Edgington v Fitzmaurice

Despite the fact that the statement was a statement of future intent, it was still misrep

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Only parties to a contract can be liable for statements made- true or false?

True

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The statement must be what by the party entering the contract?

Relied on

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Give the held of: Attwood v Small

This was not misrep as they relied on a statements from the accountants not the seller

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Give the held: Redgrave v Hurd

Even though the purchaser would have known that the verbal statement was false, this was still misrep

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What does s.12 of the Consumer Rights Act 2015 state?

The seller must provide certain pre-contractual info to the consumer for the contract to be legally binding

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What does the Consumer Protection (Amendment) Regulations Act 2014 state?

It will be a misleading omission if a trader misses out key info

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Info is misleading if what?

- Omits material info that the average consumer needs, according to context, to make informed transactional decision - Hides/provides unclear, unintelligible, ambiguous material info - Fails to identify commercial intent of commercial practice

What are the types of misrep?

Innocent Negligent Fraudulent

What does the Misrep. Act 1967 define Innocent misrep as?

A false statement made honestly (reasonable and genuine belief that the statement was true)

When is recission unavailable for misrep?

- returning the parties to pre-contractual position is impossible - contract is affirmed (stayed in contract) - delay - 3rd party gained rights over property - when damages awarded

What remedies apply for innocent misrep?

Recission Damages

Give the held of: Clarke v Dickson

C couldn't return to his pre-contractual position as his job was no longer available-recission was unavailable

Give the held of: Long v Lloyd

C unable to rescind contract as he affirmed contract when he accepted money for repairs

Give the held of: Leaf v International Galleries

He wasn't able to rescind the contract because of the delay

Give the held of: Lewis v Averay

Unfair to deprive innocent party of the car purchased in good faith-unable to rescind

Give the held of: Zanzibar v British Aerospace Ltd

If damages are awarded, recission is unavailable

What is negligent misrep?

False statement made by a person who has no grounds to believe it was real

How is negligent misrep split into 2?

under negligenve through common law statue (The Misrep Act 1967)

What does s.2(1) of the Misrep Act 1967 state?

There does not have to be special relationship between the parties as long as the V suffers a loss

Give the held of: Howard Marine v Odgen and Sons

It was negligent misrep-the registration document stated the correct info

What are the remedies available for negligent misrep?

Recission and/or damages

Give the held of: Hedley Bryne

Damages are calculated based on the tort committed

Give the held of: Royscot Trust Ltd v Rogerson

Damages awarded would be he same as in a fraud case

What case defined fraudulent misrep?

Derry v Peek

Define fraudulent misrep

A statement whim the person making the representation knows to be untrue

Give the held of: Greenridge Luton One v Kempton Investments

Buyer entitled to damages due to reliance on an untrue representation

What are the remedies available for fraudulent misrep?

Recission and/or damages

Give the held of: Smith New Court v Scrimgeour Vickers

Courts awarded the difference between price paid for shares and the sale price of shares

Give the held of: East v Maurer

The courts allowed the calculation of damages to include profit of a business

Define economic duress

When someone enters a contract due to financial threats

If economic duress is established, it makes the contract what?

Voidable-continues until the innocent party avoids it

Give the held of: Skeate v Beale

Threats to property were not deemed to be duress

Give the held of: The Siboen and The Sibotre

Serious threats should be considered duress

Give the held of: Atlas Express v Kafco

No consideration is provided for additional term-this was economic duress

Establishing pressure, the courts will consider what?

- practical effect that there is compulsion of will (force to agree) or lack of practical choice for the V - pressure must be illegitemate - illegitemate pressure is a significant cause of making the contract

Establishing pressure, the courts will consider what?

- practical effect that there is compulsion of will (force to agree) or lack of practical choice for the V - pressure must be illegitimate - illegitimate pressure is a significant cause of making the contract

Give the held of: Universe Tankship v International Transport Workers Federation

This was economic duress and the money had to be repaid

Give the held of: CTN Cash and Carry v Gallagher

The claim filed as it was lawful for D to remove the credit agreement at any time as it was stated in the contract

Give the held of: Pao On Lau Yiu Long

For economic duress to be established, the following must be considered: -did the person claiming protest? -was there another reasonable course of action available? -was he independently advised before taking action? -After entering contract, did they take the steps to avoid the thing in question?

Give the held of: Progress Bulk Carriers v Tube City

This was economic duress as the hirers only agreed as they had no alternative

Give the held of: The Atlantic Baron

Right to claim economic duress may be lost due to lapse of time

What remedies are available for economic duress?

Restitution of property or money