misrepresentation

Question 1

Definition

Answer 1

Misrepresentation is when a party to a contract has made an untrue statement during negotiations, on which another party has relied and was induced by it to enter the contract.

The statement must have been made before or at the time of the contract.

Question 2

Name the four stages of misrepresentation

Answer 2

1. Concerns the nature of the misrepresentation
2. Concerns whether the misrepresentation has induced the other party to enter into the contract
3. Concerns the type of misrepresentation
4. Application of remedies

Question 3

Outline stage one in full (info you must include in every misrep q)

Answer 3

Stage one explains the nature of the misrepresentation.
There must be a false statement of fact.

An opinion cannot be a misrepresentation (Bissett v Wilkinson)

If you say something, with no intention of doing it, this is a misrepresentation (Edgington v Fitzmaurice)

Question 4

Bissett v Wilkinson

Answer 4

An opinion cannot be a misrepresentation

Question 5

An opinion cannot be a misrepresentation

Answer 5

Bissett v Wilkinson

Question 6

Edgington v Fitzmaurice

Answer 6

If you say something, with no intention of doing it, this is a misrepresentation

Question 7

If you say something, with no intention of doing it, this is a misrepresentation

Answer 7

Edgington v Fitzmaurice

Question 8

Spice Girls Ltd v Aprilia World

Answer 8

The statement doesn’t have to be written or verbal. A misrepresentation can be done by actions or conduct.

Question 9

The statement doesn’t have to be written or verbal. A misrepresentation can be done by actions or conduct.

Answer 9

Spice Girls Ltd v Aprilia World

Question 10

Fletcher v Krell

Answer 10

Silence cannot be a misrepresentation. There is no obligation on a person to make any statement, but all that is being said must be true.

Question 11

Silence cannot be a misrepresentation. There is no obligation on a person to make any statement, but all that is being said must be true.

Answer 11

Fletcher v Krell

Question 12

Dimmock v Hallett

Answer 12

If you do not reveal the whole truth, a part truth will be a misrepresentation.

Question 13

If you do not reveal the whole truth, a part truth will be a misrepresentation.

Answer 13

Dimmock v Hallett

Question 14

With v O’Flanagan

Answer 14

If a statement is initially true, but then there is a change of circumstances before the contract is made, that information must be corrected accordingly so that it remains true.

Question 15

If a statement is initially true, but then there is a change of circumstances before the contract is made, that information must be corrected accordingly so that it remains true.

Answer 15

With v O’Flanagan

Question 16

Name all initial other cases you could add with ruling

Answer 16

Spice Girls Ltd v Aprilia World - The statement doesn’t have to be written or verbal. A misrepresentation can be done by actions or conduct.

Fletcher v Krell - Silence cannot be a misrepresentation. There is no obligation on a person to make any statement, but all that is being said must be true.

Dimmock v Hallett - If you do not reveal the whole truth, a part truth will be a misrepresentation.

With v O’Flanagan - If a statement is initially true, but then there is a change of circumstances before the contract is made, that information must be corrected accordingly so that it remains true.

Question 17

Lambert v Co-operative Insurance

Answer 17

Where a contract is made of “utmost good faith” all material facts must be disclosed, whether they are asked for or not.

(for insurance mostly)

Question 18

Where a contract is made of “utmost good faith” all material facts must be disclosed, whether they are asked for or not.

Answer 18

Lambert v Co-operative Insurance

Question 19

Tate v Williamson

Answer 19

A relationship on trust is more likely to be a misrepresentation

(eg: lawyer/client, parent/child)

Question 20

A relationship on trust is more likely to be a misrepresentation

Answer 20

Tate v Williamson

Question 21

Outline stage 2 in full

Answer 21

The misrepresentation must have induced the innocent party to entering the contract.

This means that the statement must lead the other into making the contract, and must be a critical part of making the decision.

Attwood v Small - The person entering into the contract must have solely relied on the misrepresentation. Their own opinion or information they found somewhere else will not suffice.

Question 22

Attwood v Small

Answer 22

The person entering into the contract must have solely relied on the misrepresentation. Their own opinion or information they found somewhere else will not suffice.

Question 23

The person entering into the contract must have solely relied on the misrepresentation. Their own opinion or information they found somewhere else will not suffice.

Answer 23

Attwood v Small

Question 24

Name all of the type of misrepresentation

Answer 24

Fraudulent
Negligent
Innocent

Question 25

Outline Fraudulent Misrepresentation in full

Answer 25

Fraudulent misrepresentation is where a statement is made, knowing that it is untrue, or you have been reckless as to whether it is true or not. To avoid making a fraudulent misrepresentation, the person making the statement must believe it to be true (Derry v Peek)

Question 26

Derry v Peek

Answer 26

To avoid making a fraudulent misrepresentation, the person making the statement must believe it to be true

Question 27

To avoid making a fraudulent misrepresentation, the person making the statement must believe it to be true

Answer 27

Derry v Peek

Question 28

Outline Negligent Misrepresentation in full

Answer 28

Negligent misrepresentation is where the person making the false statement believed it to be true, but had no reasonable grounds to believe so. Section 2(1) of the Misrepresentation Act 1967 - Once the victim proved there is a misrepresentation, the burden of proof is on the person making the statement that they had reasonable grounds to believe it was true

Question 29

Section 2(1) of the Misrepresentation Act 1967

Answer 29

Once the victim proved there is a misrepresentation, the burden of proof is on the person making the statement that they had reasonable grounds to believe it was true

Question 30

Outline Innocent Misrepresentation in full

Answer 30

The Misrepresentation Act 1967 clarifies the definition as being a person who made a false statement, yet they believed it to be true and had reasonable grounds to believe so.

Question 31

What remedies are available for fraudulent misrepresentation?

Answer 31

Rescission and/or damages

Question 32

What remedies are available for negligent misrepresentation?

Answer 32

Rescission and/or damages

Question 33

What remedies are available for innocent misrepresentation?

Answer 33

Only rescission. However, s2(2) of the Misrepresentation Act 1967 states that if it is equitable to do so, the court may award damages

Question 34

s2(2) of the Misrepresentation Act 1967

Answer 34

if it is equitable to do so, the court may award damages for innocent misrepresentation

Question 35

What is a rescission?

Answer 35

Rescission means that the contract is unscrambled so both parties are returned to their pre-contract positions. It is an equitable remedy, so the court will only grant it if it is fair and just to do so

Question 36

State damages under stage 4

Answer 36

All actual damage or loss coming directly from the misrepresentation is claimable.