categories

Question 1

What are the three categories of misrepresentation established by the Misrepresentation Act 1967?

Answer 1

Fraudulent (tort of deceit), Negligent (statutory claim), and Innocent (statutory claim).

Question 2

What is the legal basis for a claim of fraudulent misrepresentation?

Answer 2

The tort of deceit.

Question 3

Negligent and innocent misrepresentation are both statutory claims under which specific provision?

Answer 3

Section 2(1) of the Misrepresentation Act 1967 (MA 1967).

Question 4

Which 1889 House of Lords case provides the classic definition of fraudulent misrepresentation?

Answer 4

Derry v Peek (1889) 14 App Cas 337.

Question 5

According to Lord Herschell in Derry v Peek, what is the first and essential element required to sustain an action of deceit?

Answer 5

There must be proof of fraud, and nothing short of that will suffice.

Question 6

Lord Herschell in Derry v Peek stated that fraud is proven when a false representation is made in one of three ways. What are they?

Answer 6

(a) Knowingly, or (b) without belief in its truth, or (c) recklessly, careless whether it be true or false.

Question 7

In Derry v Peek, how did Lord Herschell view the relationship between making a statement ‘without belief in its truth’ and making one ‘recklessly’?

Answer 7

He considered recklessness to be an instance of making a statement without belief in its truth.

Question 8

According to the principles from Derry v Peek, is the motive of the person guilty of fraud relevant?

Answer 8

No, if fraud is proven, the motive is immaterial, even if there was no intention to cheat or injure.

Question 9

Why did the claimant’s action for fraud fail in Derry v Peek?

Answer 9

The claimant failed to show that the directors knew the statement was false or had an absence of belief in its truth.

Question 10

Which case defined the level of recklessness required for fraudulent misrepresentation as a ‘flagrant disregard for the truth’?

Answer 10

Thomas Witter Ltd v TBP Industries Ltd [1996] 2 All ER 573.

Question 11

According to Lord Wright MR in With v O’Flanagan, why is a court reluctant to label a failure to disclose a change of circumstances as fraudulent?

Answer 11

Because the failure to disclose may be due to inadvertence or a failure to realise the duty rests upon them.

Question 12

To prove fraudulent misrepresentation following a change in circumstances, what must the court be satisfied of regarding the failure to disclose?

Answer 12

The court must be satisfied that the failure to disclose was deliberate or dishonest.

Question 13

Who bears the burden of proof in a claim for fraudulent misrepresentation, and what is the nature of this burden?

Answer 13

The claimant bears the burden, and it is a difficult or heavy burden to discharge.

Question 14

Under s 2(1) of the MA 1967, a defendant will be liable for negligent misrepresentation unless they can prove what?

Answer 14

They must prove that they had reasonable grounds to believe and did believe up to the time the contract was made that the facts represented were true.

Question 15

How does s 2(1) of the Misrepresentation Act 1967 affect the normal burden of proof?

Answer 15

It reverses the normal burden of proof, requiring the representor to disprove negligence rather than the claimant to prove it.

Question 16

What was the misrepresentation made in Howard Marine and Dredging Co. Ltd. v A. Ogden & Sons (Excavations) Ltd.?

Answer 16

Howards stated the barges’ capacity was 1600 tonnes, when in fact it was 1055 tonnes.

Question 17

In Howard Marine v Ogden, why did reliance on the Lloyd’s Register not constitute ‘reasonable grounds’ for belief?

Answer 17

Because the true figures were in the ships’ documents, which Howards failed to check, meaning they had no ‘objectively reasonable ground’ for their belief.

Question 18

The decision in _____ established that where a representor is liable for negligent misrepresentation, they are treated for damages purposes as if they had made a fraudulent one.

Answer 18

Royscot Trust Ltd v Rogerson [1991] 2 QB 297.

Question 19

What is an innocent misrepresentation?

Answer 19

A misrepresentation which is not made fraudulently or negligently.

Question 20

An innocent misrepresentation is a statement where the representor successfully proves what two things?

Answer 20

(a) They had reasonable grounds for belief in the truth of their statement, and
(b) they believed up to the time of the contract that it was true.

Question 21

For which category of misrepresentation must the claimant prove that the representor made a statement knowing it was untrue, without belief in its truth, or recklessly?

Answer 21

Fraudulent misrepresentation.

Question 22

Under s 2(1) MA 1967, a misrepresentation is deemed negligent if the representor fails to show what?

Answer 22

That they had reasonable grounds to believe the statement was true and/or did not believe it was true up until the contract was made.

Question 23

For a misrepresentation to be categorised as innocent, the representor must successfully show both reasonable grounds for belief and _____ up until the contract was made.

Answer 23

actual belief

Question 24