SQE Contract > Vitiating Elements: Misrepresentation > Flashcards

Vitiating Elements: Misrepresentation Flashcards

(20 cards)

Study These Flashcards
1
Q

Process for approaching misrepresentation

A
  1. Is the statement a puff, term or representation?
  2. Misrepresentation?
  3. Type of Misrepresentation: fraudulent, negligent or innocent?
  4. Remedy available
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is required for a false preliminary statement to be actionable?

A

It must amount to a term or a representation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is the test to determine whether a false statement is a term or a representation?

A
  1. Common intention of parties when entered parties
  2. If common intention is unclear:
  • made by expert = term / non-expert = rep
  • written = term
  • emphasised importance = term
  • invited to verify = rep
  • short lapse of time = term
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

How does the classification of a false preliminary statement impact the remedies available?

A

Term = breach of contract
Rep = tortious damages + recission
Puff = no remedy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Definition of misrepresentation

A

untrue statement of fact by words or conduct made by one contractual party to another which induced the other to enter the contract

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What amounts to an untrue statement for misrepresentation?

A
  • Oral, writing or by conduct

GR: silence is not sufficient (no obligation to disclose material facts)
EXCEPTIONS (must say something):
* fiduciary relationship
* insurance contract
* half-truth
* fails to disclose change in circumstances

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What amounts to a statement of fact for mistatement?

A

Statement must be factual

Includes:
* Lying about intention (e.g. borrow to expand when really to pay off debts)
* no grounds for maker to beleive truth
* opinion by a person in best position to know true facts

Excludes:
* Future intention
* Opinion of maker where both parties know not an expert / not in stronger position (e.g. never sheep farmed)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

If a false statement is not made by a contracting party, what recourse does the innocent party have?

A

tort for negligent mistatement or deceit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What constitutes inducement for misrepresentation?

A

Relied on statement to enter contract (does not have to be only reason)

No misrepresentation IF:
* appointed expert AND relied on expert’s opinion
* true position is set out in contract signed by C

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is required to prove fraudulent misrepresentation?

A

Proof of fraud showing:
* D knew statement was false; or
* D did not beleive statement was true; or
* D made statement recklessly

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is required to prove negligent misrepresentation?

A
  1. D made a misrepresentation; and
  2. C suffered loss
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

When will D be liable for innocent misrepresentation?

A

D establishes they had reasonable grounds to believe their statement was true

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Remedies for misrepresentation?

A

Fraudulent and Negligent misrep:
* Damages in tort of deceit
* Recission (provided no bars)

Innocent misrep:
* NO damages
* Recission

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

How are damages in the tort of deceit calculated?

A
  • tortious basis
  • Put C in position as if no misrep
  • Damages include all consequential loss (remotness irrelevant)
  • e.g. profit if bought similar business - actual profit
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is the effect of Recission?

A
  • Contract voidable by innocent party
  • Equitable remedy
  • Back into pre-contractual position
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What are the bars to recission?

Study These Flashcards
A
  1. Affirmation (e.g. pays money)
  2. Delay (if neg: from when should have discovered / if fraud: from discovery)
  3. Bone fide purchaser acquires before recission (i.e. notifying police)
  4. Impossible to substantially restore goods or property (i.e. contract for sale of business)
17
Q

When will a clause in a non-consumer contract which excludes or restricts liability for misrepresentation be upheld?

Study These Flashcards
A

Satisfies UCTA reasonableness test

19
Q

When might damages in lieu of recission be awarded?

Study These Flashcards
A
  1. False statement about minor matter
  2. Unjust to allow recission
  3. Negligent NOT fraudulent
  4. No bars to recission
20
Q

When is it advantageous to sue for negligent mistatement rather than misrepresentation?

Study These Flashcards
A
  1. Statement of opinion; or
  2. No contractual relationship

Note: forseeability and remoteness rules apply

SQE Contract
flashcards
Decks in class (10)
# Cards
Brainscape helps you reach your goals faster, through stronger study habits.
© 2026 Bold Learning Solutions. Terms and Conditions