Misrepresentation

Once it has been determined that something is a misrepresentation, it must be determined which class it falls under. These classes are:

- Fraudulent misrepresentations. - Negligent misrepresentations. - Innocent misrepresentations.

What are the remedies for fraudulent misrepresentation?

1. Affirm or rescind the contract. 2. Claim for damages under the Law of Tort for the tort of deceit.

Exceptions to where there is a duty to disclose information so that a failure to do so DOES constitute a misrepresentation.

1. Contracts where the parties are under a duty to exercise good faith and disclose all relevant information (e.g. insurance). 2. Fiduciary relationships. 3. Where a half-truth amounts to a failure to disclose the "full story".

A fraudulent misrepresentation was made either:

1. With knowledge that it was false. 2. Without belief in the truth of the statement, 3. Recklessly or with blatant disregard for whether the statement was true or false.

What is misrepresentation?

A false pre-contractual statement or representation made by one party to the other, which misleads and induces the other party to enter into the contract.

Statement of fact excludes mere opinion.

Bisset v Wilkinson.

The statement must not have been intended to form part of the contract.

Couchman v Hill.

Expressions of a future intention are not representations.

Edgington v Fitzmaurice.

The statement need not, however, have been the only statement that the other party relied on or was influenced by in deciding to contract.

Edgington v Fitzmaurice.

Mere silence or failure to disclose information does not constitute as a misrepresentation.

Fletcher v Krell.

What is the defence to a claim for fraudulent misrepresentation?

Honest belief that the statement was true.

Statement must have induced the other party to contract. Unlike the case of...

JEB Fasteners Ltd v Marks Bloom & Co Ltd.

In this case, the defence that no reasonable bidder would have allowed such a misrepresentation to effect their bid was irrelevant, because it is not an objective test.

Museprime Properties Ltd v Adhill Properties Ltd.

Example of a case of a half-truth.

Nottingham Patent Brick and Tile Company.

How can a statement or representation be made?

Orally, in writing or by conduct.

In which case did the Courts affirm that the defendant is liable for ALL the damages occurred by the fraudulent misstatement.

Smith New Court Securities v Scrimgeour Vickers.

This case is an example of misrepresentation by conduct.

Spice Girls Ltd v Aprilia World Services.

The test for inducement is...

Subjective.

What are the requirements for an actionable misrepresentation?

The other party made a statement of material fact, the statement was made before the contract was formed, the statement was intended and did actually induce, the statement was not intended to be a binding term of the contract, the statement was untrue or falsely stated.