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Flashcards in Misrepresentation 2 Deck (17):
1

Different types of misrepresentation:

- Fraudulent Misrep
- Negligent MIsrep
- Innocent Misrep

2

Fraudulent misrepresentation:

A false statement is deemed fraudulent at common law if made, knowingly, without belief in truth and recklessly.

Derry v Peek

3

Negligent misrepresentation:

Honestly believing a statement is true. Statement maker fails to check its accuracy.

Section 2(1) MIsrep Act 1967
Howard Maine dredging v Ogden and Sons

4

Innocent misrepresentation:

Honest belief, based upon reasonable grounds, that statement is true. Statement turns out false.

Section 2(2) Misrep Act 1967

5

What is the basic remedy for misrepresentation?

Rescission

6

What is Rescission?

When the contract is set aside and all property received under contract is handed back.

7

Remedy for Fraudulent/ Negligent Misrep where rescission alone is available?

If additional loss is suffered, then damages are awarded.
Section 2(1) Misrep Act 1967

8

Remedy for Fraudulent/ Negligent Misrep where rescission has been lost?

Damages alone.

9

Remedy for Innocent MIsrep where rescission is available?

Rescission may be too drastic and courts may award damages.
Section 2(2) Misrep Act 1967

10

Remedy for Innocent MIsrep where rescission has been lost?

No rescission = No damages.
Possible indemnity

11

Indemnity

Legalizing illegal contracts

12

Barz to rescission: Affirmation

Aware of misrep but continues performance of contract.
Long v Lloyd

13

Barz to rescission: Lapse of time

Period of time from date of contract and from date when fraud could have been reasonably discovered,

Leaf v International galleries.

14

Barz to rescission: Restitution impossible

Impossible to restore parties to original positions. Can make financial alteration should rescission prove too expensive.

Erlanger v New Sombrero

15

Barz to rescission: Third Party Rights

Cannot claim returns of property to defeat rights acquired by third party.
Section 23, Sale of Goods Act 1979

16

Barz to rescission: Damages instead of rescission.

Court has discretion to award damages instead of rescission.

Section 2(2) Misrep Act 1967

17

bArzZz to rescission:

Affirmation
Lapse of Time
Third Party Rights
Damages instead of rescission