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Summary of 8 pages for the course Contract at UoW (misrepresentation)
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Chen- Wishart - Chapter 5Pre Contractual Legal Responsibility
- The simplest position for the law to have taken is to say that there is no legal responsibility for statements made
prior to the contract unless the statements have become a term of the actual contract. But the law has never
taken that view.
Common Law
- Fraud
- Derry v Peak
- Tort of Deceit
- Negligence
- Hedley Byrne v Heller & Partners Ltd
- Duty of care
Equity
- Set aside a contract
- Vivers v Pike
- Regrave v Hurd
Terms and Representation
- Oscar Chess v Williams
- Bentley (dick) productions v Harold Smith (motores) Ltd
- Esso Petroleum V Mardon
Esso
- What was promised;
- What was no promised;
- Contract term or representation
Misrepresentation Act 1967 2(1)
Where a person has entered into a contract after a misrepresentation has been made to him by another party
thereto and as a result thereof he has suffered loss, then, if the person making the misrepresentation would be liable to
damages in respect thereof had the misrepresentation been made fraudulently, that person shall be so liable
notwithstanding that the misrepresentation was not made fraudulently unless he proves that he had reasonable
grounds to believe and did believe up to the time the contract was made that the facts represented were true.
Liability for misrepresentation
- The liability for misrepresentation (common law, equity and statute) means there must be a misrepresentation
What is Misrepresentation?
1. ‘ an untrue statement’
Keats v Lord Cadogan - no general duty to disclose
Dimmock v Hallett - but if a statement is made it must represent the whole truth.
Half Truth
Spice Girls Ltd v Aprilla World Service BV - SGL knew one of the band was going to leave but still represented it was a
band of five.
, “…to say that the Spice Girls currently composed the five named individuals without going on to say that one of them
was going to leave within the period of the Agreement was false when made. What was omitted rendered that which
was actually stated false or misleading….”
True Statement becoming False
- With v O’Flanagan - value correctly stated by had decreased significantly by time contract made
- Cramaso LLP -v- Ogilvie-Grant, Earl of Seafield and others (Scotland) - continuing responsibility on the maker of a
pre-contractual representation where there was an interval between the making of the representation and the
conclusion of a contract in reliance on it
Later Knowledge of Untruth of Statement
- Davies v London Provincial Insurance CO - A party who makes a false statement in the belief that it is true is
obliged to disclose the falsity when discovered.
Conduct as Representation
- Walters v morgan - … nod or wink or shake of the head of a smile
- R v Barnard - d dressed as an oxford undergraduate - not necessary that he should have said that he was an
undergraduate
Opinion
2 ‘...of facts..’
Bisset v wilkinson - seller of land said he thought it would support 2000 sheep
Buyer knew that the owner had never kept sheep
Statement of opinion
No misrepresentation
Lord DEnning of Bisset in Esso;
“…the land had never been used as a sheep farm and both parties were equally able to form an opinion as to its carrying
capacity.”
However, Lord Merrivale comments that “if the reasonable man with the vendors knowledge could not have come to
the conclusion he stated, the description of that conclusion as an opinion would not necessarily protect him against
rescission for misrepresentation”
Smith v Land & House Property Corp – let to ‘a most desirable tenant’. He had made a statement implying facts existed
to justify it. It was a statement that those facts existed that was the false statement.
Fraudulent Statement of intent
Edgington v Fitzmaurice “The state of a man’s mind is as much a fact as the state of his digestion.”
Sindall v Cambridgeshire County Council – council had made a true statement of its knowledge even though they were
mistaken
At least party induce the contract
3. ‘..which includes…’
Edgington v Fitzmaurice
Attwood v small - buyer instructed independent agents to investigate - no reliance
Redgrave v Hurd - where there is a material representation likely to induce the representee to enter into a contract it
was an inference of law that he was no induced
LAurence v LExcourt Holdings Ltd - no defence to say that the buyer could have checked for himself
Reliance
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