What is the definition of misrepresentation?
A false statement of law or existing fact that INDUCES/ PERSUADES someone to enter the contract.
The statement must relate to an existing fact or the law at the time of the contract.
AND
it must be false
AND
it must induce the contract.
How can a statement be made?
Written, by conduct, silence and behaviour.
- Aprilia v Spice Girls [2002] EWCA 15 (CA)
- S signed promotion deal with Aprilia, fully aware that Ginger (Geri Haliwell) was planning to leave.
- Held the conduct represented that Spice Girls would remain intact and so was a misrep.
- This case demonstrates that misrep is not limited to spoken or written statements,
Traditionally, it was thought that everyone knew the law so a false statement of the law could not be misrepresentation, but now this has changed:
Pankhania v Hackney LBC [2002] EWHC 2441 (Ch); [2002] N.P.C. 123
Statement preceding sale of a car park:
‘Occupier contractual licensee, subject to 3 m notice.’
But, actually protected business tenancy, under Landlord and Tenant Act 1954
Held: Misrep of law was actionable.
Biset v Wilkinson [1927] A.C. 177 P.C. (N.Z.)
Misrepresentation does NOT include mere opinions.
Man selling farms ~ Homestead Hogans.
He was not sheep farmer, but gave his opinion “’2000 sheep” could be supported on this land.
Land sold, as it turned out land supported very few sheep.
An action alleging misrepresentation.
Held: Not a rep, a mere opinion.
Esso v Marden [1976] QB 801 CA
Another example of misrep does not include mere opinions.
E. were to open new petrol stn.
Marden, prospective tenant asked: “What”s the throughput?”
E: “200,000 gall p.a.”
So M. took lease, only 70,000 gall p.a. was given
Esso : An opinion ~ cited Bisset
HOWEVER, because esso was more experienced and had the tools to know the facts, this made it less of an opinion, more of a fact and therefore was held that where the party giving the false information has the expertise, there is actionable misrepresentation.
Edgington v Fitzmaurice (1885) 24 Ch D 459 CA
RULE: misrepresentation can NOT be a statement of intention or future action.
Directors of Co invited a loan from public.
D: to improve business by alteration to building new houses, vans & develop supply of fish.
(The real intent to pay off loans)
Held: This was not statement of future action.
Bowen L.J (p.483): “There must be a misstatement of an existing fact: but the state of a man’s mind is as much a fact as the state of his digestion. … A misrepresentation as to the state of a man’s mind is, therefore, a misstatement of fact.”
Dimmock v Hallett (1866) LR 2 Ch App 21
RULE: cannot be a mere puff.
This land is ‘fertile and improvable’
Held: Mere Puff
“Indiscriminate praise” (Treitel).
Gen Rule: Fletcher v Krell (1873) 42 LJ (Q.B) 55.
Misrep is usually NOT Silence or omission
Woman applied for post as governess
She did not disclose fact that divorcee.
Held: not misrepresentation.
Exceptions to the rules of silence:
Dimmock v Hallett (1866) LR 2 Ch App 21
Half truths can be misrep.
‘The estates’ farms full of desirable tenants’.
But all had given notice to leave.
Held: Misrepresentation by silence/half-truth.
Exceptions to the rules of silence:
With v O’Flanagan [1936] Ch 575 C.A.
Where there are a Change of circumstances.
Jan: Began negotiations to sell medical practise
D. said worth £2000 p.a.
D. fell ill.
May ~ practise worth nothing.
May ~ signed contract of sale
Held: This silence amounted to misrepresentation.
Another case that holds this exception is the Spice Girls case.
