Contract Law :Misrepresentation

Question 1

What is misrepresentation?

Answer 1

-An untrue statement of fact, made by one contracting party to the other, which induces them to enter the contract.

Question 2

What are the 3 categories of pre contract statements?

Answer 2

• Sales Puff (A vague, exaggerated statement meant to advertise or sell), legal affect = no legal affect
• contract term ( a statement that becomes part of the contract terms this laptop is 14g if it’s not that is a misrepresentation), legal affect = entitled to damages or terminate the contract)
• representation (A statement made to persuade someone to enter a contract, but it doesn’t become part of the contract, example this car has never been in a accident), legal affect = remedy reccision or damages

Question 3

When is recession an available remedy?

Answer 3

-Rescission is only available where the false statement was a representation, not a contract term.
Once the false statement is incorporated as a term, the contract is validly formed, and rescission — which treats the contract as never formed — is no longer appropriate instead damages is the better option

Question 4

When is a statement considered a term?

Answer 4

• A statement is a term if the parties intended it to be contractually binding; otherwise, it’s a representation.

Question 5

Is there a duty to disclose facts?

Answer 5

• No general duty to disclose facts – silence is not misrepresentation

Note exceptions apply

Question 6

When is silence misrepresentation?

Answer 6

• if there is a fiduciary duty I.e solicitor
• the contract is one of upmost good faith ie insurance
• it’s a half truth to create a false impression
• a true statement that becomes false