Vitiating Factors: Misrepresentation

Question 1

What is misrepresentation?

Answer 1

A false statement of material fact made by a party to the contract which induces the other party to enter a contract

Question 2

When can misrepresentation only occur?

Answer 2

During the formation of a contract

Question 3

What doesn’t misrepresentation automatically do?

Answer 3

End a contract
But party suffered can take action to end the contract

Question 4

What does rescission of contract mean?

Answer 4

The parties have returned to their pre-contractual position granted at the courts discretion

Question 5

What does repudation mean?

Answer 5

End contract immediately

Question 6

What is a false statement?

Answer 6

Statement must be untrue or inaccurate
Courts determine it on person’s knowledge

Question 7

How can a false statement be?

Answer 7

Usually written or verbal, but can be through conduct

Question 8

What happened in Gordan v Selico?

Answer 8

Painting over dry rot before selling property fulfilled elements of misrepresentation

Question 9

What does there need to be for a false statement?

Answer 9

A statement
Can’t be complete silence

Question 10

What happened in Fletcher v Krell?

Answer 10

Women never told hirers she was divorced
If they knew she was divorced, they never would have hired her
She had no duty to disclose her marital status
Was not misrepresentation

Question 11

What happened in With v O’Flanagan?

Answer 11

Doctor accurately stated his profits to induce purchasers to buy practice
He fill ill after made statement, many patients left practice
Failure to disclose any change before acceptance is misrepresentation

Question 12

What is misrespresentation with half truths?

Answer 12

Silence can be misrepresentation id it is a half-truth

Question 13

What happened in Dimmock v Hallett?

Answer 13

Seller of land truthfully told purchaser there were tenants on the land
Didn’t mention they were leaving
Part-truth was a misrepresentation

Question 14

What is the rule on relationships and trust?

Answer 14

When the relationship between parties is based on trust, silence may be misrepresentation

Question 15

What happened in Tate v Williamson

Answer 15

A financial advisor advised client to sell is land for less then half the value to clear his debt
Advisor bought land and didn’t tell client
Was a breach of trust so was misrepresentation

Question 16

What is rule around utmost good faith?

Answer 16

Where a contract is made of utmost good faith, all material facts must be disclosed whether they have been asked for or not
Often seen in contracts of insurance

Question 17

What happened in Lambert v Co-operative Insurance?

Answer 17

D renewed insurance for jewellery but didn’t tell insurance company her husband was convicted for conspiracy to steal
Jewellery was stolen, insurance company refused to pay
Was a misrepresentation so insurance company had right to refuse

Question 18

What happened in Spice Girls v Aprilla?

Answer 18

Sponsorship between Spice Girls and Aprilla
Didn’t know one of the girls intended on leaving
Promotional material was useless it contained all the girls
Was a misrepresentation was when they all attended, they represented that none of them intended on leaving

Question 19

What is a material fact?

Answer 19

Would have led a reasonable person to make the contreact and it influenced the C to enter the contract

Question 20

What must a material fact be?

Answer 20

A fact, not opinion

Question 21

What happened in Bisset v Wilkinson?

Answer 21

Seller not a sheep farmer, he genuinly believed that farmland could take 2000 sheep
Not a misrepresentation, merely his opinion

Question 22

What is a statement of future intention?

Answer 22

Not a fact and not a misrepresentation
If no intention to do what was stated, will be misrepresentation

Question 23

What happened in Edington v Fitzmuarice?

Answer 23

Company stated the shares were to be used to expand company but were actually paying off company debts
Was a statement of future intention but not what he told hte C so was a misrepresentation

Question 24

What is a party to the contract?

Answer 24

Only party to contract are liable for statements made

Question 25

What is induces other party to enter contract?

Answer 25

Statement must lead other party to make that decision to enter contract
Must have been relied on by person entering contract
Own opinion/information they found elsewhere won’t suffice

Question 26

What happened in Attwood v Small?

Answer 26

C relied on statements from personl accountants and surveyors
So wasn’t a misrepresentation

Question 27

What happens if C discovers truth?

Answer 27

If take reasonable steps, will still be misrepresentations if statement was relied upon

Question 28

What happened in Redgrave v Hurd?

Answer 28

Purchaser given accounts of sellers practice, never looked at them
Seller verbally misled purchaser about earnings
Even though purchaser would have known verbal statement was false had he looked at accounts, was still misrepresentation

Question 29

What is the rule with purchaser relying on statement?

Answer 29

It is irrelevent that the reasonable person wouldn’t have relied on statement
As long as the purchaser relied on statement, it is misrepresentation
Museprime Properties v Adhill Properties

Question 30

What is omissions in consumer context?

Answer 30

S.12 CRA 2015 states seller must provide pre-contractual info to consumer for contract to be legally binding
If there’s a change in the info, must be expressly agreed between parties
Damages available in these circumstances

Question 31

What are the types of misrepresentation?

Answer 31

Innocent
Negligent
Fraudulent

Question 32

What is innocent mispresentation?

Answer 32

Misrep Act 1967 defined this as a false statement made honestly which means the party must have had reasonable and genuine belief their statement was true

Question 33

What are the remedies for innocent misrepresentation?

Answer 33

Rescission - puts parties back into pre-contractual position
Damages
If damages awarded, rescission is unavailable

Question 34

When can’t a rescission be granted in innocent misrepresentation?

Answer 34

When it is impossible to return the parties to original position (Clarke v Dickson - couldn’t return as job was no longer available)
Contract is affirmed - innocent party decides to continue with contract despite misrepresentation, lost right to rescind contract (Long v Lloyd - lorries broke down, still paid half and lorries fully stopped working, couldn’t rescind offer)
Delays - if claim delayed, C can’t rescind (Leaf v International Galleries - after 5 yrs, realised painting wasn’t by who they said it was, too late to rescind)
A third party gained rights over property (Lewis v Averay - given fake cheque for car, buyer sold car to third party, unable to rescind)

Question 35

What is negligent misrepresentation?

Answer 35

False statement made by person who has no grounds to believe it was true
Negligence through common law
Under stature Misrep Act 1967, doesn’t need to be relationship, just misrepresentation

Question 36

What happened in Howard Marine v Ogden & Sons?

Answer 36

Info of dredgers was inaccurate, correct info was on registration doc, was negligent of them

Question 37

What are some remedies for negligent misrep?

Answer 37

Rescission
Damages
Can claim for both

Question 38

What did Hedley Byrne state?

Answer 38

Damages are calculated based on tort committed

Question 39

What did the Misrep Act 1967 state for negligent misrep?

Answer 39

Damages are calculated dependent on tort as in Royscot Trust v Rogerson where it was decided that as D was fraudulent, damages awarded would be the same as in a fraud case

Question 40

What is fraudulent misrepresentation?

Answer 40

Derry v Peek defined it as a statement which the person making the misrep knows to be untrue/reckless as to whether is it true or not
Can be incorrect answer/statement/overly ‘rose-tinted’ view

Question 41

What happened in Greenridge Luton One v Kempton Investments?

Answer 41

Buyer entitled to deposit and an award of damages due to its reliance on untrue representation when he wished to buy property

Question 42

What are some remedies for fraudulent misrep?

Answer 42

Rescission and damages
can claim for both