Misrepresentation

What is misrepresentation?

a false statement of material fact, made by one party to the other, which induces the contract (It is a vaitiating factor which spoils the contract at the point of formation and makes the contract voidable)

What do you have to show in order to show that there has been misrepresentation?

- the statement made was false
- the statement was about material fact
- the statement was made by one of the parties
- the statement induced the other party to enter the contract

What is the rule about silence as a statement?

Silence is not a statement therefore cannot be misrepresentation

Fletcher v Krell

A woman does ot state she was divorced as she had not been asked. Silence is not a misrepresentation.

What are the exceptions to the rule that silence is not a statement so cannot be misrep.?

- half truth
- Trust based relationship
- contract is one of "utmost good faith"

Which case shows that, where the contract is one of "utmost good faith" (usually INSURANCE) remaining silent can be seen as a statement AND if not all info is disclosed the insurance will be invalid?

Lambert v Co-op Insurance

What are the facts of With v O'Flanagan?

Doctor selling his practice had accurately worked out profits but before the contract was made he had fallen ill, causing patients to leave and profits to drop. Buyer had not been told

What is the POL in With v O'Flanagan?

A statement which is true when made but becomes false before the CONTRACT is made must be corrected

what is the rule about a statement through behaviour?

A statement can be made through Behaviour

which case shows a statement can be made through behaviour?

the Spice Girls Case

what are the facts of the Spice Girls case?

Despite knowing a member was going to leave, the spice girls filmed a promotional video with all members of the group. Their behaviour of filming the video with the whole group suggested they were staying together, which was misrep

What is the Mneumonic about false statement?

ShituBB (i is meaningless)

What does the mneumonic ShituBB stand for?

S - silence (Fletcher v Krell)
h - half-truth (Dimmock v Hallet)
i
t - trust relationship ( Tate v Willaimson)
u - utmost good faith ( Lambert v Co-op insurance)
B - becomes false (With v O'Flanagan)
B - behaviour ( Spice girls case)

What is meant by statement of material fact?

The statement would have led a "reasonable person" to make a contract AND it did influence them to make the contract

Are opinions statement of fact?

No, so they cannot be mis rep.

Which case shows that opinions are not statement of fact?

Bisset v Wilkinson

What are the facts of Bisset v Wilkinson?

seller of land (which has never had sheep on it) guesses how many sheep it could support. His estimate turns out to be false but there is no misrep as it was just an estimate and he was NOT AN EXPERT

What is the exception to the rule that opinions are not statements of fact so cannot be misrep?

if the person giving the opinion has greater skill or knowledge than the other, this will be a statement of fact so can be misrep.
An expert opinion becomes a statement

which case shows that an expert opinion becomes a statement?

Smith v Land & House Property Corp

What are the facts of Smith v Land & House Property Corp?

The landlord described a tenant as "a most desirable tenant" depite knowing they paid their rent erratically and under pressure. As the landlored had greater skill and knowledge of the tenant than the other person there was Misrep.

what is the rule about misrepresentation for a statement about the future?

If when you make a statement about the future and believe it to be true, there is no misrep, BUT If you make a statement about the future and you know it is not true then there is misrep.

Which case shows that making a statement about the future that you know is not true is Misrepresentation?

Edgington v Fitzmaurice

What are the facts of Edgington v Fitzmaurice?

Company falsely states that investor's money will go to building alterations when in reality they use it to pay of existing debts, none went towards building alterations

what is the Mneumonic for the law on statement of FACT?

OF
(opinions (Bisset v Wilkinson, Smith v Land & house property)
Future (edgington v Fitzmaurice)

What does Induces mean?

The statement was a criticalpart of the other party making the contrct and they relied on it

Which case shows that, if you get your own survey done, you have not relied on the statement?

Attwood v small

What are the facts of attwood v small?

seller of a mine lied about the earnings from it. Buyer got his own survey done. As the buyer had not relied on the seller's false statement there was not misrepresentation

Which case shows that ist is irrelevant that you could have found out the truth yourself?

Redgrave v Hurd

What are the facts of Redgrave v Hurd?

Buyer of a solicitor's practce had been given a set of accounts to look at BUT had RELIED on the statement of the seller, who had verbally misled him about the earnings
The buyer was entitled to rely on the seller's statement. It is irrelevant is he could have found out the truth himself

Which case shows that it is irrelevant what a "reasonable person" would have done?

Museprime properties ltd v Adhill properties ltd

What are the facts of Museprime properties v Adhill properties?

Purchaser of properties relied on inaccurate statements about rent made in auction particulars. D argues a reasonable person would have made other enquiries.
As purchaser had reled on the statements, there was reliance so can be misrep

What mneumonic covers the key POL on Misrepresentation?

ShituBB OF RIFS

what is the mneumonic ShituBB OF RIFIS?

S - silence
h - half-truth
i
t - trust relationship
u - utmost good faith
B - becomes false
B - behaviour/conduct

O - opinions
F - future

R - relies on
IF - irrelevant if YOU could have Found out
IS - irrelevant if SOMEONE ELSE would have known
F

what are the 3 types of misrepresentation?

Innocent
Negligent
Fraudulent

What is innocent misrepresentation?

when your statement is false but you made it honestly, believing it was true

what are the remedies for innocent misrepresentation?

Rescission or damages (if rescission isn't possible)

What is rescission?

an equitable (discretionary) remedy where the court will decide when to give it and if it is fair to do so. parties return to their pre-contract position

when will rescission not be available in cases of innocent misrepresentation?

iPAD 3
i
P - not Possible to put back in pre contract position
A- Affirmed- innocent party decides to continue with the contract
D - Delay
3 - 3rd party now has rights over the property

which case shows rescission will not be available if it is not possible to put the parties back into the pre-contract position?

Clarke v Dickson

which case shows that rescission will not be available if the contract is affirmed?

Long v Lloyd

which case shows rescission will not be available if ther has been delay with innocent misrepresentation?

Leaf v Intrrnational Galleries

which case shows rescission will not be possible if a third party now has rights over the property?

Lewis v Averay

what is the statute relating to types and remedies for misrepresentation?

the Misrepresentation Act 1967

what is negligent misrepresentation?

the maker of the statement had no reasonable grounds for believing it to be true

what are the two types of negligent misrepresentation?

- under the common law tort of negligence
- under the misrepresentation Act 1967

what is needed under the misrepresentation Act 1967 to show negligent misrepresentation?

there is a misrepresentation that leads to a contract and a loss is suffered

what is the advantage of proving negligent misrepresentation under the misrepresentation Act 1967?

it is much easier for the victim to get a remedy

what are the two remedies for negligent misrepresentation?

damages and/or rescission

what is fraudulent misrepresentation?

the maker of the statement knew the statement to be false

which case shows fraudulent misrepresentation?

Derry v Peek
(considered fraudulent misrepresentation but decided it was not present)

which came shows it is possible to recover damages for loss of profit following a fraudulent misrepresentation?

East v Maurer