6 Misrepresentation Flashcards
What actions can be taken for a misrepresented term, representation or mere puff?
Term - breach of contract.
Representation - action for damages under the Misrepresentation Act 1967.
Mere Puff - no legal effect.
Why do terms allow actions for breach of contract?
They are enforceable contractual undertakings.
They require forward-looking remedies.
Why do Representations give an action for damages?
They are not enforceable guarantees of the truth, they give reliance on it.
They provide backwards-looking remedies.
Why might a misrepresentation be favoured over a breached term?
It will allow recision of the contract where breach will usually still mean performance is due.
If the party wants to get out of the contract, misrepresentation may be their best bet.
What 4 ways enable terms to be distinguished from representations?
- The importance of the truth of the statement. An objectively more important statement is likely to be a term.
- Special knowledge - a term is more likely to be found if the maker has special knowledge i.e. a car dealer - Dick Bentley v Harold Smith [1957]
- Request to verify - the statement is unlikely to be a term if the maker expressly said not to rely on it.
- Passing on false information from someone else is a representation not a term.
What is the law on statements of opinion?
Opinions will not be taken as misstatements of fact.
If an opinion is given by an expert it may be considered a statement of fact - Esso Petroleum v Mardon [1976].
Can a misrepresentation be made by silence?
No, as there is no general duty of disclosure so silence or omissions are not actionable.
*Only active misrepresentations are caught by the 1967 Act.
What is Uberrimae Fidei?
A caveat to the general duty of no disclosure.
Contracts of utmost good faith i.e. insurance contracts have special measures so that all relevant facts are disclosed.
What is the law on inducement?
The actionable misrepresentation must have induced the innocent party into contracting.
There is no but for test so it needn’t be the sole reason for entering into the contract.
Where a claimant failed to verify the accuracy of the representation a claim can still exist - Redgrave v Hurd [1882].
When will inducement not be found?
- The claimant is unaware of the representation.
- The claimant knows the representation is untrue.
- The claimant is unaffected by the representation.
What are the remedies for actionable misrepresentation?
- Rescission of the contract.
2. Damages.
What are S.2(1) claims?
Claims for fraudulent and negligent misrepresentations.
The representor must have made an intentional false statement as opposed to a false statement for actionable misrepresentation.
The measure is the reliance measure - Royscot v Rogerson [1991].
What is rescission?
The setting aside of the contract, with the mutual return of benefits conferred.
Fraudulently obtained goods can be returned - Caldwell [1965].
What are the bars to rescission?
Affirmation of the contract by the innocent party.
Lapse of time.
Third party giving consideration to acquire an interest in the matter.
Inequity - William Sindall v Cambridgeshire CC [1994].
What is required for an actionable misrepresentation?
- An unambiguous statement of fact.
- Made to the claimant.
- Which induced him to enter the contract.
