Unconscional bargains + Misrepresentations Flashcards
(52 cards)
Unconscionability: Aylesford v Morris (1873)
Equity may set aside a transaction where a vulnerable party is exploited through harsh terms.
💡 Young heir, financially distressed, was charged an extortionate interest rate by a moneylender.
Unconscionability: Fry v Lane (1888)
A bargain may be set aside if one party is poor, ignorant, and has no independent advice.
💡 Sale of a reversionary interest at significant undervalue by working-class vendors.
Unconscionability: Alec Lobb (Garages) Ltd v Total Oil (GB) Ltd [1985]
Unconscionability requires more than commercial pressure or inequality; bad faith or exploitation must be shown.
💡 A struggling business agreed to disadvantageous terms but with advice and no deception.
Inequality of bargaining power: Lloyds Bank v Bundy
Contract set aside where inequality of bargaining power was combined with undue influence.
💡 Elderly farmer mortgaged his farm to support his son’s failing business, relying solely on bank’s advice.
Inequality of Bargaining Power: National Westminster Bank v Morgan
Mere inequality of bargaining power is not sufficient to set aside a contract; needs undue influence or similar equitable wrong.
💡 Wife signed a charge over the matrimonial home without understanding the implications.
Representations vs Warranties: Heilbut, Symons & Co
A representation is not a warranty unless there is clear intent for it to be a contractual term.
💡 Investor relied on a statement that a company was a rubber company; court held it was a representation, not a warranty.
Misrep vs Warranties: Oscar Chess Ltd
The question of whether a warranty was intended depends on the conduct of the parties, on their words and behaviour, rather than their thoughts. If an intelligent bystander would reasonably infer that a warranty was intended that will suffice.
Representation must be false: Dimmock v Hallet
- Statements of puff are not actionable misrepresentations
Representation must be false: With v O’Flanagan
A statement that was true when made but became false before the contract was concluded must be corrected.
💡 Failure to update a statement about medical practice income after a decline.
Representation must be false: Conlon v Simms
Conlon v Simms [2006] EWHC 401
A misrepresentation must be false and material to be actionable.
💡 Case involving misstatements in a business sale.
Representation must be one of fact, not one of opinion: Bisset v Wilkinson
An honest opinion, even if incorrect, is not a misrepresentation.
💡 Seller’s estimate of sheep capacity was not a factual assertion.
Representation must be one of fact, not one of opinion: Esso Petroleum Ltd v Mardon
Expert opinions can be treated as statements of fact if relied upon.
💡 Esso’s forecast of petrol sales was misleading and actionable.
Representation must be one of fact, not one of opinion: Smith v Land and House Property Corp (1884)
A statement of opinion may imply a factual basis, making it actionable if false.
💡 Seller described tenant as “most desirable” despite known arrears.
Representation must be one of fact, not of intention: Wales v Wadham
A genuine statement of future intention is not actionable, even if not fulfilled.
💡 Wife’s change of mind about not remarrying post-divorce.
Representation must be one of fact, not of intention: Edgington v Fitzmaurice
A false statement of intention can be a misrepresentation of fact.
💡 Company misrepresented purpose of debenture issue.
May the representation be one of law? Pankhania v Hackney
Misstatements of law can constitute actionable misrepresentations.
💡 Incorrect assertion about parking rights affecting property value.
Representation must be addressed to the party misled: Commercial Banking Co of Sydney
A representation must be made to the claimant or their agent to be actionable.
💡 Bank’s representation was not communicated to the plaintiff.
Representation must be intended to be acted upon: Peek v Gurney
A misrepresentation must be made with the intention that it be acted upon.
💡 Prospectus misrepresented company’s liabilities.
Representation must induce the contract (and be material): Dimmock v Hallet
Dimmock v Hallett [1866] LR 2 Ch App 21
A representation must be material and induce the contract to be actionable.
💡 Misleading statements about tenants’ status influenced the purchase.
Representation must induct the contract (and be material): JEB Fasteners Ltd v Marks
Even if a misrepresentation is made, it must have induced the contract for liability to arise.
💡 Company accounts contained inaccuracies, but purchase was for other reasons.
Representation must induct the contract (and be material): Atwood v Small
Atwood v Small (1838) 6 Cl & F 232
If the claimant conducts their own investigation, reliance on the misrepresentation may be negated.
💡 Buyer relied on their agent’s report rather than seller’s statements.
Representation must induct the contract (and be material): Redgrave v Hurd
A misrepresentation is actionable even if the claimant had the opportunity to discover the truth.
💡 No duty to verify representations.
Fraudulent misrep: Derry v Peek
- Knowingly
- Without belief in its truth
- Recklessly as to whether it was true or false
= Fraudulent misrep
Fraudulent misrepresentation: Doyle v Olby
False statement made knowingly, or with reckless disregard for its truth, is fraudulent misrep
