Term
| Misrepresentation: definition |
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Definition
| A statment of material fact made prior to the contract by one party to the contract to the other which is false or misleading and which induced the other party into entering the contract." |
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Term
| Misrepresentation: elements |
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Definition
- A statement of material fact
- Made prior to the contract
- Inducement into the contract |
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Term
| Misrepresentation: Statement of fact (Statement of future intent) |
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Definition
A false statement as to future intention is a misrepresentation of fact
Edgington v Fitzmaurice |
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Term
| Misrepresentation: Statement of fact (Statements of law) |
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Definition
Pankhania v London Borough of Hackney
A misrepresentation may amount to an actionable misrepresentation. |
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Term
| Misrepresentation: Statement of fact (silence) |
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Definition
Generally not actionable, but may be in the following circumstances:
- Contracts of utmost good faith
- Where there is a change in circumstances (With v O'Flanagan)
- half truths
- in a fiduciary relationship |
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Term
| Misrepresentation: Statement of fact (Conduct) |
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Definition
Spice Girls v Aprilia World Service BV
Conduct may amount to a misrepresentation. |
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Term
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Definition
- The claimant must have known of the existence of the statement
- The statement must have materially affected C's judgement such that he was induced into the contract. |
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Term
| Inducement: Existence of the statement |
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Definition
C must know of the statement's existence.
Horsefall v Thomas |
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Term
| Inducement: Reliance or inducement |
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Definition
- C must have actually relied upon the representation (Attwood v Small)
- There will be reliance even if C refuses an opportunity to verify the facts (Redgrave v Hurd)
- Reliance may be demonstrated by acting upon the representation (JEB Fastners v Marks Bloom & Co) |
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Term
| Types of misrepresentation |
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Definition
There are three categories of misrepresentation:
- Fraudulent misrepresentation
- Negligent misrepresentation
- Innocent misrepresentation |
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Term
| Fraudulent misrepresentation |
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Definition
Derry v Peek
Fraud is proved when it is shown that a false representation is made:
- knowingly, or;
- without belief in its truth, or;
- recklessly, without regard to the truth |
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Term
| Negligent misrepresentation (Common law) |
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Definition
Hedley Byrne and Co Ltd v Heller & Partners Ltd
Negligent liability may arise if:
- D carelessly makes a false statement to C
- In circumstances where it is reasonable for C to rely upon this
- where there is a special relationship between C and D |
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Term
| Negligent misrepresentation (statute) |
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Definition
s 2(1) Misrepresentation Act 1967:
- Burden of proof is on D
- A contract is required
- No special relationship is required. |
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Term
| Innocent misrepresentation |
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Definition
| An innocent statement made in belief that it was true. |
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Term
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Definition
Dependent on the type of representation.
Negligent/ Fraudulent: Rescission and/ or damages
Innocent: damages only |
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Term
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Definition
Equitable remedy. Sets aside contract and declares it void ab initio. Limitations:
- Lapse of time
- Affirmation
- Rights of third parties
- Restitution is impossible
- Damages more suitable |
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Term
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Definition
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