Misrepresentation

Question 1

What statement is required for a misrepresentation claim?

Answer 1

False statement of fact or law to induce contracting

Question 2

When must the statement take place for it to be misrepresentation ?

Answer 2

The clear and unambiguous statement must take place before the contract

Question 3

To whom can the misrepresentation be made?

Answer 3

1. Innocent party
2. A third party

Question 4

What is a false statement?

Answer 4

Not substantially correct

Question 5

What is a statement of fact?

Answer 5

Present or past conditions

Question 6

Is a statement of opinion a statement of fact?

Answer 6

No - if honestly, genuinely and reasonably held

Question 7

Is a promise misrepresentation?

Answer 7

No, it goes beyond a statement

Question 8

is a statement of future events a misrepresentation?

Answer 8

No

Question 9

Is a statement of intention misrepresentation?

Answer 9

Maybe, if the person making it knew it was false when they made it

Question 10

Is silence typically misrepresentation?

Answer 10

No

Question 11

Is there a duty on a party to disclose facts?

Answer 11

no

Question 12

When is disclosure of facts required?

Answer 12

When there is fiduciary duty between the parties

Question 13

What is ubberimae fidei (utmost good faith) ?

Answer 13

Contracts which require utmost good faith and one party has knowledge essential to the contract which is impossible for the other party to check

Question 14

Is a partial nondisclosure (a half truth) that is technically true but still misleading misrepresentation?

Answer 14

Yes

Question 15

If you make a statement that is initially true but later becomes untrue before you sign a contract, do you have a duty to correct it, and if you fail to do so, is this misrepresentation?

Answer 15

Yes and Yes

Question 16

Does the misrepresentation have to be the sole reason for the innocent party entering into the contract?

Answer 16

No, but it must be a substantial reason

Question 17

What is the test the court will use to determine if the innocent party was induced by the false statement?

Answer 17

Viewed objectively, a reasonable person in claimant’s position would have been influenced by the false statement

Question 18

Are “ad speak” or “puff” misrepresentations?

Answer 18

No

Question 19

What are the three types of misrepresentation?

Answer 19

1. Fraudulent misrepresentation
2. Negligent misrepresentation
3. Innocent misrepresentation

Question 20

What is fraudulent misrepresentation?

Answer 20

You make a statement
1. Knowingly
2. Recklessly (careless as to its truth) OR
3. Without belief in its truth

Question 21

What is negligent misrepresentation?

Answer 21

You cannot prove that you had reasonable grounds for believing, and did believe, that the facts represented were true

Question 22

What is innocent misrepresentation?

Answer 22

A misstatement not made fraudulently or negligently

Question 23

What are the remedies for misrepresentation?

Answer 23

1. Voidable
2. Rescission
3. Damages

Question 24

Is a contract voidable for any type of misrepresentation?

Answer 24

Yes

Question 25

Is rescission available and what is rescission?

Answer 25

Yes for all three types and it unwinds the contract to put parties back in their previous position

Question 26

Is rescission an equitable remedy and if so, what is the effect?

Answer 26

Yes, the courts have a discretion to grant this

Question 27

What is required for rescission?

Answer 27

1. Notification or a court order 2. Indemnity - court may order that the misrepresentor provide an indemnity to restore the pre-contract position

Question 28

What are the bars to rescission?

Answer 28

1. Affirmation of the contract 2. Lapse of time 3. Impossibility of restitution 3. Third-party rights (third party acquires rights)

Question 29

What is affirmation?

Answer 29

#You find out about the misrepresentation and you continue with the contract (by a statement or conduct)

Question 30

When does the clock run for lapse of time to bar rescission?

Answer 30

1. For all types other than fraudulent - from the time you discover, or should have discovered, the misrepresentation 2. For fraudulent misrepresentation - from the date the fraud was uncovered

Question 31

What is impossibility of restitution?

Answer 31

Impossible to restore parties to pre-contractual position as goods have declined in value or nature of subject matter changed

Question 32

How are damages dealt with for fraudulent misrepresentation?

Answer 32

Tort of deciet Put innocent party back in position they would have been but for the misrepresentationWh

Question 34

Are damages available for innocent misrepresentation?

Answer 34

No, but damages can be awarded in lieu of rescission

Question 35

When are damages in lieu of rescission typically awarded?

Answer 35

For minor misreprsentations

Question 36

What is the measure of damages usually awarded?

Answer 36

1. Losses from entering the contract 2. Incidental expenditure Unlike for breach of contract which puts parties in position they would have been