Misrep Flashcards
(20 cards)
What’s the difference between fraudulent misrep, negligent misrep and innocent misrep.
Fraudulent misrep : (1) knowingly, (2) without belief in its truth, (3) reckless as to its truth or falsity
Negligent misrep: honest belief but without reasonable care
Innocent misrep: honest belief with reasonable care
What ‘s the basic requirements for misrepresentation
(1) false
(2) statement (including conduct)
(3) of a fact
(4) induces the receipt to enter into the contract
Can silence be misrepresentation
Generally not, except for
(1) active steps to conceal
(2) half truth (already received notice to terminate but still said the farms were fully let)
(3) chance of circumstances (original true statement - untrue) (no including future intention)
(4) fiduciary duty
(5) insured party has a duty to disclose all material facts
Can a statement of opinion be a misrep?
depends on whether D is in a better position to know the truth (e.g. sale of hotel describing the tenant as a most desirable tenant)
Can a statement of future intention be a misrep?
generally not, except when teh statement maker had no real intention when making the statement
Can a statement of law be a misrep?
yes if it is a combination of law and fact
What constitutes inducts
(1) material
(2) known to the representee (directly/indirectly)
(3) intended to be acted upon
(4) actually acted upon
will the representor still be liable if the representee has an opportunity to verify the statement
it can still constitute inducement
What remedies available for misrep
(1) recission (restored to pre-contractual positions); (send notice)
(2) damages
Name four bars to recissions
(1) affirmation
(2) lapse of time
(3) impossibility (not strict)
(4) third party interest
Will the guarantor be liable to the Bank if the borrower has induced him to sign the gurantee
yes if the bank has not put on inquiry and take reasonable steps to explain it to the guarnator
What is the differnece between tort of deceit and neg /innocent misrep ? (relevant date)
for fradulent misrep, from the time when the fraud is reasonable discovered
for non-fraudulent misrep, from the time of contract formation
What do you have to do if you would like to rescind a contract?
Give notice !
What is the differnece between tort of deceit and neg /innocent misrep ? (con neg)
con neg does not apply to fraudulent misrep
What is the loss that can be claimed for tort of deceit
reliance loss (BUT NOT expectation loss) –> restore pre-contractual positions as if no misrepresentation but not as if the misrepresentation is true
current position v.s. position (what the representee would(might) have done if there is no misrep)
But no need but for test LOL
How to prove negligent misrep at common law
(1) duty of care (Hedley Byrne, proximity, assumption of responsibility)
(2) breach
(3) causation
(4) loss : all losses that are reasonably foreseeable at the time of the neg mistatement
Can damages be rewarded for innocent misrep at common law?
NO, the representee can only seek restitution. If restitution turns out to be impossible, representee shall rely on s.3(2) MO for damages.
what is Hedly byrne duty of care
(1) [holding out] special skill
(2) advice based on that skill
(3) D knows P would rely on that
(4) reliance is reaosnable
What’s the difference between neg misrep at common law and in s.3 (1)
(1) common law neg misrep has a wide scope to include 3rd party situation
(2) reverse burden of proof - from P to D once there is a false statement of fact, D to prove he has reasonable ground to believe
what s.3(2) MO talks about?
damages in lieu of recission
