vitiating factors Flashcards
(20 cards)
what is misrepresentation
a false statement of material fact made by a party to the contract that induces the other party to enter the contract
what are the three types of misrep
innocent
negligent
fraudulent
what are the requirements for misrep
A false/untrue statement
untrue/statement of material fact
Made by a party to the contract
Which induces the other party to enter the contract
a false statement
The statement made must be false/untrue.
Mere Silence wont usually amount to a false statement and cannot be a misrepresentation UNLESS there is only partial revelation/half-the truth or your are obliged, legally, to declare everything
-Fletcher v Krell
upmost good faith
Where a contract is a contract of ‘utmost good faith’ then ALL material facts MUST be disclosed whether asked about or not - this is typical of contracts of insurance
Lambert v Co-Op Insurance Society
of material fact
The statement must be one of fact, merely delivering an opinion will not create an actionable misrepresentation
Bisset v Wilkinson
induces a party into the contract
The misrepresentation will only be actionable if it is at least one of the reasons for which the C entered the contract. It does not have to be the sole reason.
attwood v small
fraudulent misrep
When there is a statement which the person making the representation knows to be untrue, or is reckless as to whether or not it is true
Derry v Peek
negligent misrep
A false statement made by a person who had no reasonable grounds for believing it to be true.
Two types:
Negligent misrepresentation at common law - Hedley Byrne v Heller
Under the Misrepresentation Act 1967
innocent misrep
a representation which is genuinely held on reasonable grounds. This is a false statement made honestly
Sidall v Cambridgeshire
remedies for misrep
For all kinds of misrepresentation damages may be awarded and/or rescission
bars to rescission
the innocent party affirms the contract (affirmation) - long v lloyd
there is a lapse of time - leaf v international galleries
the parties cannot go back to their original, pre-contractual position (impossibility) - vigers v pike
rescission would deprive an innocent third party of rights acquire over the property which is the subject of the contract - white v garden
what is economic duress
Economic duress is pressure which goes beyond the usual rough and tumble of business dealings
Interfoto v Stiletto
what happens if economic duress is established
contract becomes voidable
what is required for the finding of economic duress
Pakistan International Airline v Times Travel:
a threat or pressure that is illegitimate;
the threat or pressure in question causes the party to enter into a contract
the party has no reasonable alternative but to give in to the threat or pressure.
pressure must be exerted onto a contractual duty
he economic pressure must go a great deal further than the ordinary pressure of the market
The Atlantic Baron
pressure was illegitimate
A threat to do an unlawful act will always be illegitimate, but a threat to do a lawful act will only be illegitimate if the threat is unreasonable. - Atlas Express v Kafco
Lawful threat may include:
a threat not to renew a contract or to let a company go bankrupt - CTN Cash and Carry v Gallagher
an indication that a party is unable to continue with a contract - Williams v Roffey
A legitimate threat made in bad faith can be the basis for a claim in duress - Times Travel v Pakistan International Airlines
threat must induce party into the contract
Duress must be one of the reasons for entering a contract, but does not have to be the only or even the main reason
Barton v Armstrong
claimant had no real choice but to enter the contract
threat must have negated the consent of the other party and left them with no realistic alternative but to comply with the demand
The Universe Sentinel
The party seeking to claim duress must have protested at the time and must not hesitate in taking legal action to avoid the contract - The Atlantic Baron
duress and time
The right to end a contract for duress may be lost through lapse of time
the atlantic baron
