Misrepresentation

Question 1

define Misrep

Answer 1

A false statement of fact, made before or at the time of the contract, which induces the other party to enter into the contract.

Question 2

Step 1: False statement

Answer 2

The untrue statement can be spoken, written, or by conduct (Spice Girls v Aprilia).

Question 3

Step 1: False Statements Exceptions

Answer 3

• Silence is usually not a misrepresentation (Fletcher v Krell)
  u nless:
  1. There is a duty to disclose a change of circumstances (true statement when made becomes false) (With v O’Flanagan).
  2. The representor gave a half-truth (Dimmock v Hallett). 3. A trader omitted key information an average consumer would require (Consumer Protection Regulations).

Question 4

Step 2: Statement of Fact

Answer 4

• Must be fact, not just opinion (Bissett v Wilkinson).
• expert opinion may be an implied representation of fact (Esso V Marden)
• Fact = person making the statement does not honestly believe their own opinion (Smith v Land and House Property Corporation)
• A statement about a future intention is not a fact; a false statement about a current intention is a misrepresentation (Edgington v Fitzmaurice)

Question 5

Step 3: Inducement

Answer 5

-The statement must have induced the other party to enter the contract.
- No inducement if the other party didn’t believe the statement (Attwood) or had other reasons for contracting (JEB Fasteners).
- It doesn’t matter if the claimant could have discovered the truth by taking reasonable steps (Redgrave v Hurd).
- The statement must be made before or at the time of entering the contract (Roscorla v Thomas).

Question 6

Types of misrep

Answer 6

• Fradulent - Person making the statement knows it to be untrue, or is reckless as to its truth (Derry v Peak).
• Negligent - Statement maker failed to take reasonable care and skill to check accuracy, thus failing to appreciate it was false.
• Innocent - False statement made entirely without fault (genuine belief the statement was true).
  -> remedy Rescission and Damages claim under s.2(1) MA 1967 (Howard Marine v Ogden).

Question 7

Remedies of misrep

Answer 7

• Fraudulent - Rescission and Damages (Greenridge Luton One v Kempton).
• Negligent - Rescission and Damages claim under s.2(1) Misrep Act 1967 (Howard Marine v Ogden), alternatively common law tort of negligence (Hedley Byrne v Heller)
• Innocent - EITHER Rescission OR Discretionary Damages instead of rescission under s.2(2) MA 1967 - s.2(2) where recission too dramatic