Contract - Misrepresentation

Question 0

Esso Petroleum v Marden

Answer 0

Implied representation of fact where maker has special knowledge or skill

Petrol sales

Question 1

Bissett v Wilkinson

Answer 1

Opinion or beliefs are not actionable misreps

Farm sheep

Question 2

Smith v Land

Answer 2

Implied representation of fact where maker is in a better position to know the truth

Desirable tenant

Question 3

Edgington v Fitzmaurice

Answer 3

A statement of intention to act in a particular way in the future may be interpreted as a statement of fact if clear that the maker has no intention of so acting.

Same for dishonest statement of opinion

Use of money raised in prospectus

Question 4

Hands v Simpson Fawcett

Answer 4

Silence does not constitute a mis rep.

No general duty on contracting parties to reveal information unless asked

Motoring convictions at job interview

Question 5

Notts Patent Brick v Butler

Answer 5

A half truth or partial disclosure is a misrep

Statement technically true but misleading

Solicitor, restrictive covenants, not read

Question 6

With v O’Flanagan

Answer 6

A duty to tell of the change of circumstance which caused the statement to become inaccurate. Misrep if fails to disclose.

Income of medical practice.

Lord Wright “a continuing rep”

Question 7

Spice Girls Ltd v Aprilia

Answer 7

Conduct gives a false impression and party fails to correct that impression - is a misrep.

Video

Question 8

Smith v Chadwick

Answer 8

No actionable misrep where no inducement

Never heard of director in prospectus

Question 9

Attwood v Small

Answer 9

No actionable misrep where relied on own judgment or investigation

Earning potential of mine

Question 10

Redgrave v Hurd

Answer 10

Can still be actionable even though an invitation to discover the truth had been offered

Account books offered at sale

Question 11

Edgington v Fitzmaurice (point 2)

Answer 11

Misrep does not not have to be sole reason for inducement but must be actively present in mind when entered the contract.

Question 12

Derry v Peek

Answer 12

Defined fradulent misrep as one made

• knowingly
• without belief in its truth
• recklessly, careless as to whether true or false.

Question 13

Hedley Byrne

Answer 13

Tort case - negligent misstatement causing financial loss

Special relationship duty of care needed (where maker possess skill or knowledge relevant to the subject-matter and it is likely e other party will rely on that statement.
No contract needed
Burden of proof on claimant (easier to go MA67 but need contract for that)

Question 14

Howard Marine & Dredging v Ogden

Answer 14

Claimed both Hedley Byrne and MA67

Advantage of MA67 - burden of proof reversed to D for reasonable grounds for belief
Do not need to prove duty of care as contractually bound.

Bridge LJ “MA67 imposes an absolute obligation not to state facts which the representor cannot prove he had reasonable grounds to believe” -onerous obligation for D.

Question 15

Erlanger v New Sombrero Phosphate

Answer 15

Restoration may be substantial rather than complete

In equity rescinded contract, returning mine to sellers and accounted for profits

Question 16

Long v Lloyd

Answer 16

Once affirmed with full knowledge of misrep, lost the right to rescind.

Question 17

Leaf v International Galleries

Answer 17

Passage of time alone may preclude rescission

art, 5years before realised different artist - too late

Question 18

McConnell v Wright

Answer 18

Fradulent misrep damages - measured as out of pocket reliance costs (in tort as not a term)

Question 19

East v Maurer

Answer 19

Can recover hypothetical profits would have made in investing in different business “lost opportunity costs”

Salon

Question 20

Doyle v Olby

Answer 20

Recoverable losses are all damage from fraud even if not reasonably foreseeable

Question 21

Royscott trust v Rogerson

Answer 21

Damages for negligent misrep are tortious rather than contractual - out of pocket losses “fiction of fraud”

All lost opportunity costs and all direct loss

Question 22

Swingcastle v Alastair Gibson

Answer 22

Possible fornnegkigent misstatement to include opportunity costs too.

Question 23

William Sindall

Answer 23

Evans LJ “difference in value between what C was misled into believing he was acquiring and the value he actually received”. Obiter re damages for MA67.

Question 24

Whittington v Seale-Hayne

Answer 24

Rescission may sometimes be accompanied by an indemnity in respect of any obligations created under the contract. Claim more limited than a damages claim.

Question 25

Thomas Witter v TBP

Answer 25

Unlikely that an exclusion clause for fradulent misrep would satisfy the reasonableness test.