Vitiating Factors (Paper 3-Section B Topic 6) Flashcards
What is a representation?
Statements which influence the decision whether to enter a contract or not
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
Define recission
Good reason for the party to end the contract-other party has misled the other and they realise in agreement
Define repudiation
A party to the agreement makes it clear they are not going to complete their side of the agreement
What does the Misrepresentation Act 1967 state in the into?
If the statement proved to be untrue, the C has no right to claim
The false statement must be what?
Untrue/Inaccurate
Give the held of: Gordan v Selico
Painting over dry rot before selling a property fulfilled the elements of misrep.
Give the held of: Fletcher v Krell
Wasn’t misrep. as she had no duty to disclose her material status
Give the held of: With v O’Flanagan
Failure to disclose any change before acceptance is misrep.
When can silence be misrep?
When it is a half truth
When parties relationship is based on trust
Give the held of: Dimmock v Hallet
This part-truth was misrep
Give the held of: Tate v Williamson
This was a breech of trust so was misrep
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
Give the held of: Lambert v Co-Operative Insurance
The insurance company had the right to refuse to pay
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
Give the held of: Bisset v Wilkinson
This was not misrep-it was an opinion.
How is material fact tested?
A reasonable person would have entered a contract
Give the held of Edgington v Fitzmaurice
Despite the fact that the statement was a statement of future intent, it was still misrep
Only parties to a contract can be liable for statements made- true or false?
True
The statement must be what by the party entering the contract?
Relied on
Give the held of: Attwood v Small
This was not misrep as they relied on a statements from the accountants not the seller
Give the held: Redgrave v Hurd
Even though the purchaser would have known that the verbal statement was false, this was still misrep
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
What does the Consumer Protection (Amendment) Regulations Act 2014 state?
It will be a misleading omission if a trader misses out key info
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
