Misrepresentation Flashcards Preview

Contract Law - Vitiation > Misrepresentation > Flashcards

Flashcards in Misrepresentation Deck (37):

What is actionable misrepresentation?

A false statement off act which induces a party to enter a contract (this happens before contract is formed)


If there is misrepresentation what happens to the contract?

It becomes voidable


What governs misrepresentation?

Common law
Misrepresentation act 1967


What is the criteria to help establish misrepresentation?

A false statement of fact or law
Which is made before the contract is formed
And it must induce the claimant who relied upon it


What is a statement of law or fact NOT?

Statement of opinion
Sales talk/puffs
Statements of future intention


What case is relevant to statement of opinion?

Bissett v Wilkinson


Facts of Bissett v Wilkinson

C purchased land from D after D said it would suitable for 2000 sheep
After purchase C later found the land could not hold that many sheep


Outcome of Bissett v Wilkinson

The court found that this was a statement of opinion rather than fact because D had no knowledge of sheep farming it was an opinion


Case related to sales talk does not amount to a statement of fact

Dimmock v Hallet


Facts of Dimmock v Hallet

D described the land as 'improbable and fertile' during the sale of land


Outcome of Dimmock v Hallet

The courts described this as a puff rather than a representation, therefore it could not amount to a statement of fact


Explain how statements of future intention and misrepresentation...

The general rule is that it cannot be a fact if it is about the future as it has not happened yet
However, if someone has knowledge that it will happen then it can amount to a misrepresentation


What case is relevant to statements of future intention...

Edgington v Fitzmaurice


Facts of Edgington v Fitzmaurice

C was a shareholder in a business
He received a request for a loan from D to help grow the business
It was in fact to pay off his loans
C sought repayment of money on the grounds of misrepresentation


Outcome of Edgington v Fitzmaurice

It amounted to misrepresentation because it was an untrue intention as to the future of the money and what was going to happen to it
Therefore it was a misrepresentation and the money should be paid back


What format can misrepresentation make?

NOT silence


What case is relevant to the format of misrepresentation?

Spice girls v Aprilla World Service


Facts of Spice girls v Aprilla World Service

Aprilla contracted the spice girls on May 6th 1998 to sponsor a concert tour
On May 29th 1998 Geri left the group


Outcome of Spice girls v Aprilla World Service

Aprilla stated the contract was based on the representation they would all work together.
Because she left, there was a misrepresentation by conduct


What case is related to the point that misrepresentation must be made before the contract is formed?

Attwood v Small


Facts of Attwood v Small

C was purchasing a mine and was told exaggerated statements about its capacity by D
C got this checked but their expertise erroneously said they were correct
6 months later they found out it was wrong and sought to rescind the contract


Outcome of Attwood v Small

Court held there has been no misrepresentation because they did not rely on the representation by the vendor
They relied on the verification of their agents


What are the three types of misrepresentation?



What is innocent misrepresentation? What remedies are available?

When D genuinely believes the representation is true and has reasonable grounds for that belief
Remedy = recession or damages


What is negligent misrepresentation? Remedies?

D should know what they are doing will amount to a misrepresentation however they are ignorant (reword this)



What governs negligent misrepresentation?

Common law
Misrepresentation act


What does the misrepresentation act state about negligent misrepresentation?

Negligent misrepresentation is a statement without reasonable grounds for belief in its truth
Burdens of proof is on D
Contract is required
special relationship is not required


Negligent misrepresentation under common law...

Burden of proof on claimant
No contract required
Special relationship is required


What case is relevant to negligent misrepresentation under common law?

Hedley Byrne Co Ltd v Partners


Facts of Hedley Byrne Co Ltd v Partners

C (an advertising agency) ask D (a bank) for a reference about one of their customers
D said customer would be able to meet financial obligations
Customer did not


Outcome of Hedley Byrne Co Ltd v Partners

The statements could amount to negligent misinterpretation because they carelessly made a false statement that c relied upon


What is a special relationship

At least 1 party has some special relationship and they can tell the other party will rely on this info


What is fraudulent misrepresentation? Remedies?

Burden of proof lies in the claimant
Lord Herschell defined it as 'knowing to be false, without belief it was true'


What case is relevant to fraudulent misrepresentation?

Derry v Peek


Facts of Derry v Peek

Lord Herschell defined fraudulent negligence as 'a statement knowing to be false, without belief it us true'


What are the restrictions to the availability of recession?

Affirmation: a party has implied they wish to continue with contract
Laps of time: if too long it can be seen as affirmation
Rights if third party: if 3rd party has gained bona fida rights property then it won't be available
It is impossible e.g subject matter has changed
Damages is more suitable remedy


What is recession? What type of remedy?

It is an equitable remedy which aims to put the parties the position they were in before the contract started