Misrepresentation

Exceptions to statement of opinion

- Representor never actually held that opinion and lied about it - Representor did hold an opinion but no reasonable would hold that opinion - Representor implied that they knew the facts - Representor held themselves as an expert - Facts cannot be equally known on both sides

1) Fraudulent misrepresentation

-Knowledge of the falsity by the representor and intend to mislead -Lord Herschell - fraud is proven when it is shown that a false representaiton has been made; - knowingly - without belief in its truth; or - recklessly, careless whether it be true or false

1) What must a false statement be?

A false and positive statement - Compare the statement with reality and ask yourself if it was true or false.

Definition

A misrepresentation is a false statement of a material fact made expressly or impliedly by one party to the contract (representor) to the other party (representee) to induce the latter to enter into the contract.

Statement of fact v statement of law

If a statement of law is made fraudulently it can still be seen as a misrepresentation.

2) Statement was one of fact

It must be a statement of a past or existing fact, and not: - a puff; Dimmock v Hallet - a statement of intention or promise as to the future. But an exception if; - Representor had no intention to comply - Statement is based on a current situation -a statement of opinion

2) Negligent misrepresentation

Representor owes a DOC to the other party because they know or ought to have known that the other party is relying on that information

3) Innocent misrepresentation

The representor had an honest but mistaken belief.

Categories of misrepresentation

1) Fraudulent 2) Negligent 3) Innocent

Exceptions to the silence provision

-Distortion of a positive representation (half truth); Dimmock v Hallett (1866) -Subsequent discovery by representor that the statement was false -Statement becomes untrue because of change of circumstances -Parties are in a fiduciary relationship

3) Statement was intended to induce and did induce the innocent party

-Representation made directly or indirectly to the innocent party - representation by a third party cannot be used to make a case of misrepresentation unless the third party was an authorization of the contracting party. - Must be a causal link between representation and the entry into the contract

Remedies for fraudulent misrepresentation

-Rescission - Contract is voidable - Rescission must be communicated to the other party, unless it is impossible OR - Damages in contract (if statement is in fact a term)

Remedies for innocent misrepresentation

-Rescission only -No damages in tort OR -Damages in contract if statement is a term

4) Statement was material to inducement

The statement must be material but not necessarily the only or major cause - Nicholas v Thompson

Elements

1) False statement was made 2) Statement was one of fact 3) Statement was intended to induce and did induce the innocent party 4) Statement was material to inducement

Can a positive statement be silent?

No - silent is not sufficient. W Scott Fell & Co v Lloyd (1906)

When are exclusion clauses valid?

Only for innocent or negligent misrepresentation

Remedies for negligent misrepresentation

-Rescission -Damages in contract if statement is a term