Misrepresentation

Question 1

Redgrave v Hurd [1881]

Baggallay LJ the ‘representation once made relieves the party from an investigation’

Answer 1

• Contributory negligence is not a bar to rescission as long as there is reliance on the misrepresentation
• Purely innocent misrepresentation can give rise to rescission

Question 2

Spice Girls v Aprilia [2002]

non-verbal misrepresentation

Answer 2

One of the requirements of misrepresentation is that a party makes a false statement of fact or law. This case shows that conduct which conveys information can amount to a statement of fact or law

Question 3

Banque Keyser Ullman v Skandia (UK) Insurance [1990]

must make a positive statement

Answer 3

• non-disclosure could not be construed as misrepresentation
• even if it did, such a disclosure would not come within the Misrepresentation Act since it was not a misrepresentation made by one party to another

Question 4

Edgington v Fitzmaurice [1885]

‘a man’s mind is as much a fact as the state of his digestion’

Answer 4

A statement of intention is a statement of fact and can thus be the basis for an actionable misrepresentation
A misstatement need not be the sole cause of the representee entering into contract to be actionable -> as long as he had acted on the misstatement

Question 5

Smith v Land and House Property [1884]

Bowen LJ ‘where the facts are equally well known to both parties, what one of them says to the other is frequently nothing but an expression of opinion … But if the facts are not equally known to both sides…’

Answer 5

Statements of opinion are statements of fact if they fall within the knowledge of the representor but not the representee.
But if the facts are not equally known, then a statement of opinion by the one who knows the facts best involves often a statement of fact, for he impliedly states that he knows facts which justify his opinion.

Question 6

Bisset v Wilkinson [1927]

untried sheep farm in NZ.Derry v Peek [1889] – proving that a misrep is ‘fraudulent is near impossible

Answer 6

A statement of mere opinion on the subject matter of a sale is not an actionable misrepresentation, provided that the parties understand it to not be made on any factual basis.

Question 7

Oscar Chess v Williams [1957]

car dealer was in at least as good a position to discover the car’s true age as the private seller

Answer 7

Where the seller makes clear that he has no special knowledge of the facts represented and is merely passing on information from an external source, the representation likely not incorporated as a contractual term.

Question 8

Dick Bentley v Harold Smith [1965]

the misrepresentation was a ‘term’ due to dealers better knowledge

Answer 8

A representation will be incorporated as a term even where representor is ignorant as to its accuracy if the representor was in a position where he ought to have known of the facts that were represented.

Question 9

Esso Petroleum v Mardon [1976]

pre-MA1967 statement about petrol sales by Esso expert – a term

Answer 9

A forecast made with special knowledge amounts to a statement of fact that can be actionable -> can be misrep.

Question 10

With v O’Flanagan (1936)

sale of a medical practice – change of facts before sale completed

Answer 10

• the representation made by the defendant was intended to induce the claimant to enter into the contract
• therefore would be considered ongoing until the contract was signed
• This meant that at the time that the contract was signed, the representation was untrue
• The defendant ought to have told the claimant of the change of circumstances

Question 11

Howard Marine v Ogden [1978]

s2(1) defence - barges’ documentation v Lloyd’s register

Answer 11

• Under s2(1) Misrepresentation Act 1967, the burden of proof is on the representor to prove that he had reasonable grounds for belief in the accuracy of the statement
• There need not be a duty of care for liability to arise under the section

Question 12

Royscott v Rogerson [1991]

s2(1) representor is liable for damages as if they were fraudulent even though they were not

Answer 12

• The damages under s2(1) Misrepresentation Act 1967 are the same as the tort of deceit
• are not subject to foreseeability of loss

Question 13

Sindall v Cambridgeshire CC [1994]

Hoffmann LJ obiter on s2(2)

Answer 13

• Damages in lieu under 2(2) Misrepresentation Act 1967 (‘MA 1967’) should be calculated on a contractual basis
• The discretion to award damages in lieu under s2(2) MA 1967 should have regard to the relative importance of the misrepresentation to the transaction

Question 14

Salt v Stratstone [2015]

Court of Appeal allowed rescission; ‘practical justice’ could be achieved by compensating the representor who could prove depreciation or use’

Answer 14

• Depreciation in value of the subject matter of a contract is not a bar to rescission as it can be made good by compensation
• Damages may only be awarded under s2(2) Misrepresentation Act 1967 (‘MA 1967’) where rescission is available

Question 15

First Tower v CDS (Superstores International) [2018]

‘no-reliance’ clauses caught by s3

Answer 15

• Non-reliance clauses give rise to contractual estoppel
• Non-reliance clauses are subject to the reasonableness test under s3 Misrepresentation Act 1967 (‘MA 1967’)