Misrepresentation

• Define misrepresentation

  A false statement of fact made by a party in the contract that induces the other party to enter the contract
• False statement
• Spice Girls

  Making a statement should be interpreted broadly to include everything
• General Rule

  Silence or Non disclosure cannot amount to a false statement
• Exception 1: Fletcher V Krell - there was no duty to disclose her marital status so her silence Was not a false statement
• Exception 2: Lambert - contracts with high degree of trust
• Exception 3: Dimmock - half truths are a misrepresentation
• Exception 4: O'Flanaghan - change of circumstances can be a misrepresentation
• Exception 5: Consumer Rights - If a business leaves out any important information that would enable a consumer to make an informed decision this can be misrepresentation
• False statement must be of fact 


  General Rule: Statements of opinion will not amount to statement of fact - Bisset

  Exception 1 : Smith v Land - if seller has specialist knowledge or skills can be more than a mere opinion thus a fact

  Statement of future intention : a statement that expresses a future intention is speculation rather than fact -Edgington

  Sales Talk does not amount to material fact

  Gillette

  Red Bulls
• False statement must be made by a party in the contract

  Seller makes the false statement
• False statement

  Must induce the other party to enter the contract
• C must rely on the statement

  RedGrave v Hunt
• C must have known about the existence of false statement

  Horsefall v Thomas
• False statement must have materially affected the C's decision

  Atwood v Small
• Innocent Misrepresentation

  s2(1) Misrepresentation Act 1967 - believes it's true and has reasonable grounds to believe it's true (Leaf v International Gallerie)
• Rescission Innocent Misrepresentation 


  s2(2) Misrepresentation Act 1967 could award damages instead of rescission if it was fairer Zanzibar
• Negligent Misrepresentation

  s2(1) Misrepresentation Act 1967 - Believes it's true but has no reasonable grounds to believe it is true (Howard Marine) Rescission and damages are calculated in the same way as fraudulent misrepresentation
• Fraudulent Misrepresentation

  Makes statement which they know is not true Derry v Peek
• Fraudulent misrepresentation could claim loss of profit

  East v Maurer
• Bisset statement of opinions 


  Will not amount to statement of material fact
• Edgington statement of fact 


  Future intention will amount to material fact