misrepresentation

• misrepresentation - a false statement of material fact made by a party to the contract that induces the other party to enter the contract.
• false statement:

  usually written or verbal but doesn't have to be. - Spice Girls V Aprilia World
• Fletcher V Krell:

  silence cant be a misrepresentation, no obligation on a person wishing to enter a contract to make any statement about what is being offered but anything said must be true.
• the following qualifications on this principle: false statement

  • change of circumstances
  • making of a half truth
  • confidential relationships
• With V O'Flanagan: a statement can become a misrepresentation even if it was true when it was said. A person must correct information where the situation has changed between making the representation and the acceptance.
• Dimmock V Hallett: silence can be a misrepresentation where a statement made is a half truth.
• Tate V Williamson: where the relationship between the parties is based on trust then silence can be a misrepresentation.
• Lambert V Co-op Insurance:

  where a contract is a contract of utmost good faith then all material facts must be disclosed whether asked about or not, commonly seen in insurance.
• the misrepresentation must be of material fact and cannot be a statement of opinion.
• statement of opinion: Bisset V Wilkinson
• the statement must induce the other party to enter into the contract and must be critical in the decision.

  Attwood V Small
• Redgrave V Hurd: it doesn't matter if the victim could've discovered the truth by taking reasonable steps or it was unreasonable to rely on the untrue statement.
• Museprime Properties V Adhill Properties: what the reasonable person would do is irrelevant
• types of misrepresentation:

  • innocent
  • negligent
  • fradulent
• innocent misrepresentation: The Misrepresentation Act 1967 clarifies that this means the statement was made honestly and the person who made it believed it to be true.
• negligent misrepresentation: this is a false statement made by a person who believed the statement was true but had no reasonable grounds to believe this.

  2 types:

  • under common law of negligence
  • under misrepresentation act 1967 s2(1) - Howard Marine
• negligent misrepresentation under common law tort of negligence:

  in case of Hedley Byrne the court suggested a claim for a misrepresentation based on negligence would be allowed.
• negligent misrepresentation under Misrepresentation Act 1967:

  s2 (1) - created a statutory liability for negligent misrepresentation which doesn't require a special relationship, all that is needed is a misrepresentation which results in a contract and victim suffers a loss.

  Howard Marine case
• fraudulent misrepresentation: origins of the tort of deceit.

  Derry V Peek - set this out as a statement being made without the belief that it is true.
• remedies for innocent misrepresentation:

  • rescission
  • damages
• remedy of rescission:

  an equitable remedy, it is discretionary. The parties are returned to the position they were in before the contract was made.

  Not available;

  • restitution of original position is impossible- Clarke V Dickson
  • contract is affirmed - Long V Lloyd
  • delay - Leaf V International Galleries
  • a third party has gained rights over property - Lewis V Averay
• remedies for negligent misrepresentation:

  • recession and/or
  • damages
• remedies for fradulent misrepresentation:

  • damages
  • recission