Innocent misrepresentation

• under the misrepresentation act 1967, what is innocent misrepresentation?

  Innocent misrepresentation is a false statement that is genuinely held on reasonable grounds. It is a false statement made honestly, as the person making it believed it was true.
• what are the two remedies for innocent misrepresentation?

  Rescission and Damages
• what is recission?

  an equitable remedy giving the judge discretion about whether or not to grant it. If it is granted it means that the parties will be put in a pre contract position.
• When will recission not be possible?

  If returning the parties to a pre-contract position isn't possible

  If the contract was affirmed

  If there is a large delay

  If there is property involved, a third party has gained rights over it.
• What is the significance of the case of Clarke v Dickson?

  Clarke v Dickson shows how recession wont be possible if returning the parties to a pre-contract position is impossible.
• what case shows how recession wont be possible if returning the parties to a pre-contract position is impossible?

  Clarke v Dickson
• In terms of when recission isnt possible, what does it mean if the contract has been affirmed?

  This is where the C carries on with the contract despite being aware of the misrepresentation.
• What is the significance of the case of Long v Lloyd?

  It shows where a contract has been affirmed despite awareness of misrepresentation, recession isn't possible.
• what case shows where a contract has been affirmed despite awareness of misrepresentation, recession isn't possible?

  Long v Lloyd
• Delay, once a contract has been completed any complaints should arise within a reasonable amount of time. This can be seen in the case of Leaf v International Galleries, C lost the right to rescission because it was 5 years since he had bought the fake painting even though he had no way of knowing it was a fake until he tried to sell it
• A third party has gained rights over the property: Where someone else has gained an interest in the property then the right to rescind the contract is lost as it would be unfair on the third party- In the case of Lewis v Avery.
• Briefly describe the facts in the case of Lewis v Avery?

  The C sold a car to a fraudster who gave him a cheque that bounced. The fraudster then sold the car onto D. The C claimed rescission and wanted the car to be returned. His claim failed as this would be unfair to the D who bought the car in good faith.
• Is the victim party immediately entitled to damages in innocent misrepresentation?

  No right to damages under innocent misrepresentation. The court has discretion in this area and can choose to grantdamages instead of rescission under section 2 (2) Misrepresentation Act 1967