Misrepresentation

• Definition

  • false statement of fact which induces the other party to enter the contract
• False statement of fact

  • cannot be a statement of opinion
  • Bisset v Wilkinson- statement of opinion is not a misrepresentation
  • But- unless D was an expert then it can be relied on- Smith v Land and House Property Corp
• Silence

  • Cannot be misrepresentation- Smith v Hughes
  • But, Half-truths, statement which does not present the truth may be misrepresentation- Nottingham Brick and Tile Co v Butler
  • Statements which become false, duty to disclose the truth when the situation changes- With v O'Flanagan
  • Other representations- statement not to be interpreted too literally, Gordon v Selico Ltd- painting over dry rot before selling
• Misrepresentation must have induced the contract

  • false statement must have induced the representee to enter into the contract
  • Must be material and it must be relied on
• Materiality

  • must be that the reasonable person would have been induced into the contract through it
• Reliance

  • representee must have relied on the misrepresentation
  • no reliance if they are not aware of the misrepresentation- Horsfall v Thomas
  • no reliance is the person does not rely on the misrepresentation- Attwood v Small
• Types of Misrepresentation

  • Fraudulent misrepresentation
  • Negligent misrepresentation
  • Wholly innocent misrepresentation
• Fraudulent misrepresentation

  • defined by Lord Herschell in Derry v Peek, " a false statement that is made knowingly, or without the belief that its the truth, or recklessly as to whether it be true of false"
• Negligent misrepresentation

  • a false statement made by a person who had no reasonable grounds for believing it to be true
• Wholly innocent misrepresentation

  • this is a false statement which the person makes honestly believing it to be true
• Remedies for misrepresentation

  • rescission- put all parties in the position they were in before the contract was made