Misrepresentation

Question 1

definition of ‘representation’

Answer 1

A ‘representation’ is a statement made by a party which is intended to be taken seriously, and is intended to induce the other party to enter the contract. A false statement constitutes a misrepresentation.

Question 2

3 elements of misrepresentation

Answer 2

1. statement of fact
2. statement relates to existing or past fact
3. statement was made during negotiations before the contract was made

Question 3

False statement of fact

Answer 3

A representation is a statement of fact as opposed to opinion

Question 4

Bisset v Wilkinson

Answer 4

Vendor of a holding, not yet used as a sheep farm, told a prospective purchaser he assumed the carrying capacity was 2000 sheep. After 2 years, he realised it was wrong and brought action for misrepresentation.
Held: the statement was merely an opinion and it was known to both parties that the land had not yet been used for sheep farming.

Question 5

Existing or past fact

Answer 5

A representation relates to some existing fact or event. Or a statement about the future implies a statement of present fact it may be a representation as to the present.

Question 6

Ware v Johnson

Answer 6

Plaintiff agreed to buy defendant’s kiwifruit orchard. Defendant stated it would produce crops in the following seasons. The vines failed to grow so Plaintiff brought action.
Held: defendant was liable for misrepresentation.

Question 7

Silence

Answer 7

In normal circumstances, silence does not constitute misrepresentation. There must be some positive statement or conduct to amount to misrepresentation.

Question 8

March construction Ltd v Chch city council

Answer 8

March construction tendered for some works and an employee made a mistake resulting in the tender being under-priced. After the council had accepted the offer the mistake was discovered. March sought relief for silence.
Held: there was no misrepresentation on the part of the Council, they had no legal obligation to point it out.

Question 9

Actionable misrepresentation s35

Answer 9

1. there must be a representation
2. the misrepresentation was made by or on behalf of the defendant
3. the misrepresentation was made to a contracting party
4. the representee was induced to enter into the contract by the misrepresentation
   Additional common law requirement; the representor must have intended the misrepresentation to induce the representee to enter into the contract.

Question 10

Wakelin v RH and EA Jackson Ltd

Answer 10

Plaintiff purchased defendant’s bar. Defendant knew of a competing business to open nearby but kept silent.
Held: defendant’s silence distorted the truth and constitutes for a misrepresentation.

Question 11

Inducement

Answer 11

Misrepresentation need not be the sole inducement to the contract must it must be a significant factor that influenced the plaintiff.

Question 12

Intention to induce

Answer 12

The offending statement must have been intended to induce the contract.
The CoA in Savill v NZI Finance Ltd has held that additional requirements must be:
- either the person making the representation intended to induce it
- a normal person would be induced by the misrepresentation