what is misrepresentation?
you cannot make a false statement that induces a party into a contract
what happens if misrep is found?
to be treated as part of the contract, and thus contract law remedies can be provided
what does Closurepac say about how to interpret misrep?
words to be read into context, in light of surrounding circumstances, not viewed in isolation - an objective approach
section 35 CCLA
If a party to a contract (A) has been induced to enter into the contract by a misrepresentation, whether innocent or fraudulent, made to A by or on behalf of another party to that contract (B),—
(a) A is entitled to damages from B in the same manner and to the same extent as if the representation were a term of the contract that has been breached; and
section 34 CCLA
If a contract expressly provides for a remedy for misrepresentation, repudiation, or breach of contract, or makes express provision for any of the other matters to which sections 35 to 49 relate, those sections have effect subject to that provision.
section 37 CCLA
party entitled to cancel contract via misrep if they have been induced whether innocent/fraud into contract and misrep is of essential/implied, resulting in substantive different outcome/increased burden/reduced benefit
what does Savil v NZ Finance say about what misrep is?
a false or erroneous statement of past or present fact
three “elements” considering statements
- point to statement
- of past/present fact
- must be false/erroneous
what is the suggested approach to misrep
- consider plain meaning (Magee v Mason - plain meaning comes first)
- is statement prima facie a statement of past/present fact (express/implied?
- if so, is it true/false?
what happened in Magee v Mason?
buyers made an assumption based on what they said “we’ve never had any problems with it” it was not an express guarantee of no leakiness because it was meaning it had experienced no leaks while they owned it. cavea entor - let the buyer beware. dissent - courtney J - there are big losers and winners in contract law.
what happened in Ridgeway empire?
similar to Magee, but it was an assertion of fact - house does not leak. in fact, house had previously leaked and was excluded in building report he gave her. the part that leaked now was the part that leaked all those year ago. he had lived there for 6 years - did not disclose all material facts but response was clear + unequivocal.
emphasis from magee + ridgeway?
each case will turn to its facts
what are the types of statements?
- predictions
- opinions
- puffery
- silence
what is a prediction?
statements about future based on past/present assumption “false forecase”
3 prediction cases?
ware v Johnson - kiwi fruit would be ready to harvest in 2 years, but at time had been sprayed w/ poison…no conceivable future with kiwifruit, thus misrep
esso petroleum - petrol station for sale, foot traffic calculated but did not include the fact that council was limiting access to station from the main highway, so prediction not accurate (vendor knew). known fact of present that impacted the future
NZ Motorbodies - prediction for $130k profit, was $100k loss, misrep on reasonable factual basis.
what is opinion?
Usually not held to be misrep because it is not a statement of fact BUT if there is an implied fact that is false may be a misrep if it was unreasonable to hold opnion to expertise knowledge
Smith v Land - most desirable tenant implies basic reasonable assumptions of good tenants are true such as paying rent which tenant did not do therefore implausible that any reasonable person
would consider them desirable
Bisset v Wilkinson - vendor said land could farm 2k sheep however did not actually know for sure because
they were not sheep farmers and maybe the other party was just poor sheep formers
- no misnep here - note that if one party has more expertise typically
vendors it will point move towards statement of fact
what essentially comes with express statements?
alongside it is an implied statement that there are past and present facts that justify prediction
what is silence via misrep statements?
If you say something that is strictly the but
overall paints an inaccurate picture
what is puffery?
often statements are more puffs
and not to be taken seriously Carlil as
statements of fact however there is room for argumen
what does chitty on contracts say about silence?
mere silence is not a misrep because vendors have no duty to
disclose (cavea enter)
controversial duty to say more? tikanga maybe?
general silence principles from Ladstone?
failure to givea complete picture will allow silence to distort a positive representation
duty to speak may arise if it is obvious the purchaser has been misled
wakeman v jackson
An agent tells a buyer of
business there is nocompeting
businesses within half a mile not
strictlyfalse atthetime but they
knew a competing business was
opening up closeby Anyone
listening would infer there was no change to happen, thus misrep
vincent v thomson
Motel soldfor 24 units only
had buildingconsent for 12 it
was implied they had consent for
all 24 not economicallyviable
thus misrep
the approach to silence from Ladstone v Leonora?
if X makes a false statement A without knowing it is false this is innocent
if X makes a true statement 8 but conveys an implied false statement C X is only innocent if they were unaware of C
