Mistake and Misrepresentation Flashcards
(16 cards)
Mutual mistake - Raffles v Wichelhaus
2 ships with same name departing from the same place to deliver cotton at different times. Buyer never got the cotton from the ship they agreed to. One party thought they were selling the December sailing, other thought they were buying the October sailing, so there was never an agreement between the parties
Common mistake - Couturier v Hastie
Shipment of corn made on behalf of traders in London. Corn had already been sold at a harbour halfway there as it was starting to ferment - neither party knew. Contract void for mistake because a fundamental aspect of the contract was the existence of a cargo of corn, which both parties wrongly believed existed
Unilateral mistake - Hartog v Colin & Shields
Contract made for Argentinian hare fur, sold per piece (due to trade custom). The sellers write to Hartog stating a price per pound, which ended up being a third of the price it should of been - made a mistake of saying per pound instead of per piece. Held that the contract was void because Hartog should’ve known it was a trade custom to sell per piece rather than per pound
Identity mistake - Ingram v Little
2 sisters selling car, ‘Mr Henderson’ calls them interested in buying. He offers a check as payment. One sister goes to post office to check if there is a Mr Henderson living at the address he gave - there is, so they agree to take the check. He is not Mr Henderson, takes the car and sells it to a used car dealer. The sisters made a mistake about the identity of the other party, so contract was void
Quality mistake - Phillips v Brooks
North goes to Phillips’ store, offers to pay by check but won’t take items until the check clears, asks to take some and leave others until after. North pawns the items at Brooks’ shop. Phillips argues identity mistake, court held it was quality mistake - mistook qualities of the man in the shop (eg honesty)
Equitable mistake - The Great Peace
Ship unable to navigate, needed another ship to help. Message sent to nearest ship, the one that receives it isn’t the nearest. Entered into contract with a mistake (quality mistake - geographical position). Court of Appeal turned down the concept of equitable mistake, can only be mistaken at common law (overturned Sulley v Butcher)
Statements - Spice Girls Ltd v Aprilia World Service BV
Aprilia contracted Spice Girls for multiple concerts on basis that they will be performing based on their promotional photo-call. Ginger Spice recently left the group, so obligation wasn’t fulfilled - SGs made a misleading representation through their conduct. Statement can be made orally, verbally or via conduct
Statement of fact with changed circumstances - With v O’Flanagan
During formation of contract, seller made representation that the medical practice being sold was worth £2000. 4 months later, value had decreased to £250. When a statement later becomes untrue, the party has to disclose the change of circumstances to the other
Statement of fact (future intent) - Edgington v Fitzmaurice
Company director requested debenture bonds from shareholders, claimed the funds received would go towards supplies and building alterations, would actually be used to pay off other liabilities. Statement of future intent becomes a statement of fact if the party has special knowledge of the actual future intention and the one provided was simply used to mislead the other party into forming a contract
Inducing to enter a contract - Museprime Properties v Adhill Properties
Purchasing of a rental property, seller stated that the rent review was done when it wasn’t. A misleading statement of fact needs to only be a factor which induced the other party into the contract, doesn’t have to be the only or main reason
No duty to investigate - Redgrave v Hurd
There is no duty to investigate the accuracy of the statement presented, buyer can take seller at their word
Fraudulent misrepresentation - Derry v Peek
Prospectus released stated that company was permitted to use steam-powered trams, but didn’t have this right. People bought stakes in it upon reliance of this statement.
Fraudulent means that a party made a false representation knowingly and recklessly, without belief in its truth
Innocent misrepresentation
One made where there is a genuine belief that it is true and there is reasonable ground for belief
Negligent misrepresentation - Hedley Byrne v Heller
D claimed their client could meet their financial obligations to an agency, but they couldn’t. Negligent misstatement - carelessly makes a false statement and the circumstances make it reasonable to assume that the statement will be relied upon and there is a special relationship between the parties
Misrepresentation Act 1967
If a party enters into a contract due to misrepresentation and suffers a loss, the other party will be liable for damages even if they didn’t make the representation fraudulently, unless they had reasonable grounds to believe the facts represented were true
Recission - Salt v Stratstone Specialist Ltd
If recission (cancelling a contract) is available as a remedy, the Misrepresentation Act 1967 states that the court may provide damages as a substitute of recission if it is equitable to do so
Damages are unavailable if recission is barred
