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Flashcards in Misrepresentation Deck (34)
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1

Ceveat emptor

The general rule on silence, let the buyer beware. No duty disclose.

2

Esso v Mardon (1976)

Collateral warranties result in damage.
Esso represented to the defendants that they could sell a certain amount of petrol despite a change of planning permission. This was deemed to be a term in the contract. They were given a remedy under misrepresentation and negligent misstatement.

3

Dick Bentley v Harold Smith (Motors) (1965) CA

"... the question whether a warranty was intended depends on the conduct of the parties, on their words and behaviour, rather than on their thoughts. If an intelligent bystander would reasonably infer that a warranty was intended that will suffice." per Denning LJ
Car was misrepresented to have only driven 20,000 miles and have had a new gear box fitted. The CA held this was a term in the contract as the defendants had special knowledge and skill.

4

Routledge v McKay (1954)

There was too much time between the misrepresentation and the contract to be misrepresentation.

5

Bannerman v White (1861)

It was of great importance to the claimant that the hops hadn't been cultivated in sulphur. This was a term as the representee attached importance to the statement.

6

Definition

A false statement of fact (by words or conduct) made by one party to the contract to the other which, although not a term in the contract, induces the latter to enter into the contract.

7

Edgington v Fitzmaurice (1885) CA

A false statement of conduct must be dishonestly made in order to be a misrepresentation.
"There must be a misstatement of existing fact: but the state of a man's mind is as much a fact as the state of his digestion" per Bowen LJ

8

Bisset v WIlkinson (1927)

The opinion that the farm would support 2000 sheep was an honest opinion so was not actionable.

9

Notts Patenet Tile Co v Butler (1886)

Defendant was not aware because they had not checked but gave a misleading impression this was knowledge. The court ruled this was a misrepresentation.

10

Curtis v Chemical Cleaning and Dyeing Co (1951)

There was a half truth as the defendant stated the company was exempt from damage to bead and sequins but the document stated it was exempt from all damage.

11

With v O'Flanagan (1936)

Case concerning the cost of a medical practice - the defendant's silence/failure to reveal the change of circumstances amounted to an actionable misrepresentation.

12

Uberrimae fidei

Contracts of the utmost good faith, such as insurance contracts

13

Fiduciary relationships

Under an obligation to disclose some information as in a special duty of trust and confidence, such as a doctor and patient

14

Attwood v Small (1838)

B had not relied on A's statement as they had employed an expert agent to investigate the mine for them.

15

Redgrave v Hurd (1881)

There was an actionable misrepresentation even though there was an offer to view the accounts. In modern law it is likely the damages will be reduced in contributory negligence.

16

Horsfall v Thomas (1862)

The misrepresentee must be made aware of the misrepresentation.

17

Peek v Gurney (1973)

Misrepresentation must be made to the party misled.

18

Derry v Peek (1889) HL

"The statement must be made (1) knowingly or (2) without belief in its truth or (3) recklessly, careless whether it be true or false." per Lord Herschell
The prospectus falsely stated the company had the right to run trams as they where under the assumption that the permission was a formality. This was not a fraudulent misrepresentation.

19

Remedies

Rescission when inducement (tortious/backwards).
Term/breach of contract compensates had the contract successfully taken place.

20

Doyle v Olby (1969) CA

All consequential losses compensated for. Not foreseeable losses.

21

Smith v Scrimgeour (1996) HL

Put the claimant in the position he would have been had the fraudulent misrepresentation not been made.

22

East v Maurer (1991) CA

Hairdresser case was able to claim for loss of profits for fraudulent misrepresentation.

23

Leaf (1950) CA

Time was a bar to rescission. It would not be correct to hold a contract open indefinitely.

24

Vigers v Pike (1842)

Destruction of a piece of property that is one half of the claim means that there cannot be rescission.

25

Third parties' bona fide rights

When voidable rescission is not available

26

Hedley Byrne v Heller (1964) HL

Negligent misrepresentation is actionable in tort

27

Misrepresentation Act 1967, section 2(1)

(i) there must be a contract
(ii) fiction of fraud; imposes liability as if the defendant is fraudulent
(iii) it reverses the burden of proof ("so liable... unless he proves")
(iv) the defendant will not have to pay damages if he can prove he had reasonable cause to believe and he did believe up to the time the contract was made that the facts represented where true

28

Howard Marine v Odgen & Sons (1978) CA

It was not reliable to rely on the Lloyd's register.

29

Royscott Trust v Rogerson (1991)

Claimants where entitled to all consequential losses (car % case).

30

Misrepresentation Act 1967, section 2(2)

For a wholly innocent misrepresentation there is no right to sue for damages for misrepresentation and the victim is only entitled to rescission (and an indemnity intended to help restore the parties to their original positions).