Types of Misrepresentation and Remedies Flashcards
What is innocent misrepresentation?
The person makes the false statement wholly honestly without negligence
What is negligent misrepresentation?
A false statement made by a person who believed the statement to be true but who had no reasonable grounds for believing the statement to be true
In what case was negligent misrepresentation established?
Hedley Byrne v Heller
What is the criteria for negligent misrepresentation in S.2(1) Misrepresentation Act 1967?
- Misrepresentation
- Results in a contract
- V suffers a loss
What was held in Howard Marine v Ogden and Sons?
For negligent misrepresentation there must be reasonable grounds to believe the statement is true
What was held in Derry v Peek?
Fraudulent misstatement occurs when:
- D knows the statement is false
- D does not believe the truth of the statement
- D is reckless as to the truth of the statement
What is a fraudulent misrepresentation?
(Derry v Peek)
A person knowingly makes a false statement to induce a contract
What is a rescission?
An equitable remedy that aims to return the parties to the positions they were in before the contract was made
When is rescission not available?
- Restitution is impossible
- Contract has been affirmed
- Delay
- A third party has gained rights over a party
What was held in Clarke v Dickinson?
Rescission is impossible as partnership could not be returned
What was held in Long v Lloyd?
The claimant had affirmed the contract to buy a lorry as they used it when it was broken
What was held in Leaf v International Galleries?
Rescission was not available as a remedy due to a delay in finding out the truth
What was held in Lewis v Averary?
A third party had acquired possession of a fraudulently stolen vehicle
What is stated in S.2(2) Misrepresentation Act 1967?
Damages in lieu of rescission for negligent and innocent misrepresentation when rescission is not possible
What was held in East v Maurer?
Damages for a loss of profit may be recovered for fraudulent misrepresentation
