Misrepresentation Flashcards
(22 cards)
What is misrepresentation?
Misrepresentation is an untrue statement of fact made by one party during pre-contractual negotiations, which induces the other party to enter into the contract.
What are the requirements for misrepresentation?
The misrepresentation must be false, made before or at the time of the contract, relied on, and must have induced the party into the contract.
What is the authority for misrepresentation?
Misrepresentation Act 1967
What is the first legal rule regarding false statements?
Opinion does not equal misrepresentation.
Bisset v Wilkinson – A statement of opinion is not a misrepresentation unless the person giving it is in a position to know the truth.
What is the second legal rule regarding false statements?
A false statement of future intention can be a misrepresentation if the maker had no intention of acting on it.
Edgington v Fitzmaurice – A statement of future intent can be a misrep if the maker had no intention of acting on it.
What is the third legal rule regarding false statements?
Conduct can equal misrepresentation.
Spice Girls Ltd v Aprilia – A misleading act or conduct during negotiations can count as misrepresentation.
What is the fourth legal rule regarding false statements?
Silence usually isn’t misrepresentation, but if a party speaks, they must tell the whole truth.
Fletcher v Krell – A party is not required to speak, but if they do speak, they must tell the whole truth.
What are the exceptions to the silence rule in misrepresentation?
Half-truths are misrepresentations, and if a statement becomes false due to changing circumstances, failure to update it equals misrepresentation.
Dimmock v Hallett; With v O’Flanagan.
What is the fifth legal rule regarding false statements?
In fiduciary or trust-based relationships, there is a duty to be fully honest.
What must be shown to prove inducement in misrepresentation?
You must show that the misrepresentation led the claimant to enter the contract.
What is the first type of misrepresentation?
Fraudulent Misrepresentation is defined as a statement made knowingly false, without belief in its truth, or recklessly.
Derry v Peek.
What remedies are available for fraudulent misrepresentation?
Rescission (voids the contract) and damages in tort of deceit (all losses, including indirect ones).
What is the second type of misrepresentation?
Negligent Misrepresentation occurs when the party believed the statement was true but had no reasonable grounds for that belief.
What remedies are available for negligent misrepresentation?
Rescission and damages at the same level as fraudulent misrepresentation (all consequential loss).
What is the third type of misrepresentation?
Innocent Misrepresentation occurs when the party genuinely believed the statement was true and had reasonable grounds to believe so.
What remedies are available for innocent misrepresentation?
Rescission or damages instead if the court thinks rescission is unfair or impossible.
What does rescission do?
Rescission voids the contract as if it never existed, requiring both parties to give back what they received.
What may prevent rescission?
Affirmation, delay in claiming, impossibility of restitution, or third-party rights intervening.
What damages are available for fraudulent misrepresentation?
Full tort damages (all direct + indirect loss).
What damages are available for negligent misrepresentation?
Same as fraudulent misrepresentation (under s.2(1)).
What damages are available for innocent misrepresentation?
Damages only if the court awards it under s.2(2).
What is economic duress in relation to misrepresentation?
If the misrepresentation was made under illegitimate pressure, leaving the claimant no real choice, the contract may be voidable.
