An untrue statement (Misrepresentation - Vitiating factors)-FS

Question 1

What is an actionable misrepresentation in contract law?

Answer 1

An untrue statement of fact (by words or conduct) made by one party which induces another party to enter into a contract.

Question 2

What are the core elements of an actionable misrepresentation?

Answer 2

1. A false statement of existing fact (not opinion or intention)
2. Made by one contracting party
3. Relied upon by the other party in entering into the contract

Question 3

Can conduct constitute misrepresentation?

Answer 3

Yes, misrepresentation can occur through conduct if it leads the other party to a false understanding of facts.

Question 4

Does silence usually amount to misrepresentation?

Answer 4

No, silence alone does not generally amount to misrepresentation, as there is no general duty to disclose material facts during negotiations.

Question 5

What is a “half-truth” in the context of misrepresentation?

Answer 5

A statement that is literally true but misleading because it omits material information; it can amount to a misrepresentation.

Question 6

When can silence be treated as misrepresentation?

Answer 6

• If a half-truth is told
• If a previously true statement becomes false due to changed circumstances
• In contracts of utmost good faith
• In fiduciary or confidential relationships

Question 7

What is a continuing representation?

Answer 7

A statement that was true when made but becomes false due to a change in circumstances; the party must disclose the change or risk committing misrepresentation.

Question 8

What types of contracts impose a duty of full disclosure?

Answer 8

• Contracts of utmost good faith (e.g. insurance contracts)
  • Fiduciary relationships (e.g. solicitor-client, trustee-beneficiary)

Question 9

What is the principle behind misrepresentation in fiduciary relationships?

Answer 9

Parties in fiduciary positions have a duty to disclose all material facts due to the trust and confidence placed in them.

Question 10

Can misrepresentation occur through omission in fiduciary or good faith contracts?

Answer 10

Yes. Failure to disclose material facts in such relationships can amount to misrepresentation.

Question 11

What does a court consider in determining if a statement is a misrepresentation?

Answer 11

• Whether it was a statement of fact, not opinion or future intention
• Whether it induced the contract
• The knowledge and position of the person making the statement

Question 12

In what scenario would a change in circumstances create a duty to update previous statements?

Answer 12

When the original statement becomes false before the contract is concluded, failing to correct it may result in misrepresentation.

Question 13

What distinguishes a statement of fact from opinion in misrepresentation?

Answer 13

A statement of fact relates to an objectively verifiable truth; opinion is a belief or judgment and generally not actionable unless made dishonestly or by someone in a position of authority.

Question 14

What remedy is available if actionable misrepresentation is proven?

Answer 14

The contract may be rescinded and/or damages may be awarded, depending on the type of misrepresentation.

Question 15

What type of misrepresentation did Fatima commit when she failed to disclose the tumour found in her horse after saying it was healthy?

Answer 15

A misrepresentation by failure to disclose a change of circumstances; the original true statement became false and was not updated.