Types of misrepresentation

Esso Petroleum

1. Duty may arise in a pre-contractual relationship 2. The individual giving the advice need not be in the business of giving that type of advice - when giving advice - it should be given in a professional capacity 3. Duty can arise simply in circumstances where one party was possessed of superior skill and knowledge which was relied on by the other person

4 types

1. Fraudulent misrepresentation 2. Negligent misrepresentation at common law (negligent misstatement) 3. Negligent misrepresentation under statute (Misrepresentation Act) 4. Innocent misrepresentation

CLAIMANT (WHAT IS THE CLAIMANT REQUIRED TO PROVE):

All the five elements of an actionable misrepresentation (that a false statement of fact induced them to enter into the contract) - Negligence is presumed (need to be proved)

1. Fraudulent misrepresentation

An absence of an honest belief is necessary to constitute fraud

Howard Marine & Dredging Co Ltd v A Ogden & Sons (Excavations) Ltd [1978]

Bridge LJ: "The statute imposes an absolute obligation not to state facts which the representor cannot prove he had reasonable ground to believe" Therefore, duty of care needs not be proved

Hedley Byrne v Heller [1963] (key authority)

Duty of care must be shown to exist between the parties (Caparo test - reasonable foreseeability; proximity, fair...)

3. Negligent misrepresentation under the Misrepresentation Act 1967

Maker of statement must positively establish that they had reasonable grounds for believing in the truth of the statement

4. Innocent misrepresentation

Neither fraudulent, not negligent A party has made a statement with an honest belief in its truth, and with reasonable grounds for that belief

WHAT DEFENCE CAN THE DEFENDANT CALL IF THERE IS AN ACTIONABLE MISREPRESENTATION UNDER THE ACT:

Then, the defendant must prove a reasonable belief in the truth of the statement: Howard Marine & Dredging - it was not reasonable for them to rely on Lloyd's Register when they could have checked the documentation that came with the barge

Foster v Charles (1830)

motive is irrelevant (dishonesty is needed)/ tort of deceit

Derry v Peek

test - "to have made knowingly; or without belief in its truth; or recklessly, careless whether it be true or false: 1. Knowingly 2. Without belief in its truth 3. Recklessly, careless whether it be true or false