Misrepresentation Flashcards
(7 cards)
Misrepresentation
This is “a false statement of material fact made by a party to the contract that induces the other party to enter into a contract. It is covered in the Misrepresentation Act !967
False statement
A statement is false if it is untrue or inaccurate. There must be a “statement” which is either verbal, written, through behaviour or conduct. Silence cannot usually be a misrepresentation
Exceptions
- There is no need to offer info that has not been requested:Fletcher
- If a statement was true when first made, it can become a misrepresentation if it becomes false before the contract is made. In such circumstances, the info must be corrected: With
- Where there is a relationship between parties based on trust, silence can be a misrepresentation: Tate
- some contracts re declared to be contracts of “utmost good faith.” If so material facts must be disclosed whether asked for or not: Lambert
Material fact
Fact that a reasonable person would recognise as relevant & central in a decision to be made, as distinguished from an insignificant, trivial or unimportant detail.
Made by a party to the contract
Must be made by one of the parties to the contract or an agent acting on their behalf
Induces the other party to the contract
-The false statement must play a critical part in leading the other party to make a decision to enter into the contract.
- The fact the FS is relied on is enough, it does not mater that the truth could have easily been discovered:Redgrave
- If the party seeks info from elsewhere, may not be a misrepresentation: Small
Types of misrepresentation
S1 of Misrepresentation Act 1967:
- Innocent- FS made honestly, so the person making it believed it to be true
- Negligent- not deliberate lie but a failure of one of the parties to properly check facts & figures & instead rely on an assumption or info from another: Howard Marine
- Fraudulent: when person knows that the statement they are making is untrue or they are reckless to whether it is untrue:
