CONTRACT LAW L4 - Misrepresentation - ELEMENTS OF AN ACTIONABLE MISREPRESENTATIO

Question 1

What may qualify as representations? (1)

Answer 1

Pre-contractual statements made during negotiations leading to a contract.

Question 1

What is a representation? (1)

Answer 1

A statement asserting truth of a given state of facts.

Question 2

Who is a representor? (1)

Answer 2

The party who allegedly made the representation.

Question 3

Who is a representee? (1)

Answer 3

The party who allegedly received the representation.

Question 4

What is an actionable misrepresentation and where can this definition be found? (3)

Answer 4

‘An unambiguous false statement of fact made to the claimant and which induces the claimant to enter into the contract with the statement maker.’ Merkin, R & Saintier, S.Poole’s Textbook on contract law.

Question 5

What is the effect of a misrepresentation? (1)

Answer 5

To make a contract voidable but not void subject to limitations.

Question 6

What are the 5 elements of a misrepresentation? (5)

Answer 6

1. Unambiguous
2. False statement
3. Statement of fact
4. Addressed to the claimant
5. Induces the claimant to enter into the contract with the statement maker.

Question 7

What is meant by unambiguous and which case shows this? (3)

Answer 7

The representation must be clear. MCLERNY V LLOYD’S BANK 1974 - the representor will not be liable if the representee has placed its own unreasonable construction on the representation.

Question 8

What is meant by false statement? (1)

Answer 8

The statement is false and if it is not false it must be substantially correct.

Question 9

What does the case of AVON INSURANCE PLC V SWIRE FRASER LTD 2000 demonstrate? (1)

Answer 9

A representation may be true without being entirely correct, provided it is substantially correct.

Question 10

What does the case of KLEINWORT BENSON LTD V MALAYSIA MINING CORP 1989 establish in regard to statement of fact? (2)

Answer 10

A representation is not an undertaking to do, or not to do something. It is a statement asserting a given state of affairs.’

Question 11

What does the case of DIMMOCK V HALETT 1866 demonstrate in terms of mere puffs and representations? (2)

Answer 11

Mere advertising ‘puff’ will not qualify as a representation and the law allowed a salesperson a good deal of latitude in their choice of language.
A description of the land as ‘fertile and improvable’ did not amount to a representation but was viewed as a mere puff.

Question 12

What is meant by statement of fact - conduct? (2)

Answer 12

Usually made by words but can be made by conduct. In GORDON V SELICO 1986, the intentional concealment of dry rot was deemed to be a misrepresentation.

Question 13

What is meant by statement of fact - statement of law? (2)

Answer 13

The traditional rule was that a statement of law could not give rise to an actionable misrepresentation. However, the distinction has now been abolished and it has been decided that it can.

Question 14

What is meant by statement of fact - statements that do amount statement of fact? (1)

Answer 14

Statements of opinion, of future intention and instances of silence are not actionable but there are some exceptions.

Question 15

What does the case of JEB FASTENERS V MARK BLOO 1983 demonstrate? (3)

Answer 15

Induces the claimant to enter into the contract with the statement maker - it must have caused the representee to enter into the contract in order to be an actionable misrepresentation. This was not satisfied in this case where the Court of Appeal held that the defendants representation did not play ‘real and substantial’ part in inducing claimants to act.

Question 16

What does the case of PAN ATLANTIC CO LTD V PINE TOP INSURANCE CO LTD 1995 demonstrate in term of induces the claimant to enter into the contract with the statement maker? (2)

Answer 16

The court must question whether the representation is material. This is an objective test - did the statement relate to an issue that would have influenced a reasonable person.

Question 17

What does the case of MUSEPRIME PROPERTIES LTD V ADHILL PROPERTIES LTD 1900 demonstrate if the statement is found to not be material? (2)

Answer 17

If the statement is found to not be material, then the inducement of the claimant cannot be inferred as a matter of fact and the claimant must prove that they were subjectively induced.

Question 18

When is inducement established? (2)

Answer 18

If the representee shows that the statement would have influenced a reasonable person and the representor cannot show that the statement did not influence this particular representee and / or representee shows that it was personally induced by the statement.

Question 19

When is there no actionable misrepresentation in terms of inducement? (3)

Answer 19

If the statement was not actually communicate to the representee, the statement did not affect the representee’s decision to enter the contract and the statement as known to be untrue by the representee.