Misrepresentation

Conditions it must fufill
1. 1. False Statement of Fact
  1. YES: Statement of Past or Present Fact: Meaning statement comes with implication of untrue fact
  2. NO: Statement of Opinion
    1. Unless he had a reasonable basis for his opinion eg. Superior knowledge
      1. Esso Petroleum Co. Ltd v Mardon (1976)
    2. Unless he told you he held that opinion but he didn't
  3. NO: Statement of Intention
    1. Unless he had no intention but said he had
  4. NO: Silence
    1. No duty to disclose facts which will affect your decision
    2. Unless silence makes something half-true
    3. Keeping silent implies statement is true
      1. Pilmore v Hood (!836)
    4. There is failure to correct a previous statement that has ceased to be true before contract
      1. Spice Girls v Aprilia World Service (2002)
2. 2. Made by one contracting party to another
  1. Direct addressee to recipient
3. 3. Induced the other party into entering it
  1. When is there no inducement?
    1. 1. Not aware of misrep 2. Aware but know it;s not true 3. Not influenced
  2. When is there inducement?
    1. Materiality Test (Objective): Reasonable person in the shoes of the party be induced
    2. Actual Inducement Test (Subjective): Representee proves that he was actually induced even though other might not be
  3. Does it matter if I get induced even though I never check?
    1. Generally, should not put burden on representee. Unless it is reasonable and easy to verify
      1. If they can easily verify the truth, reasonable for them to do so. If representer makes negligent or innocent misrep, less harsh consequences
Types of Misrepresentations
1. Fraudulent
  1. Made knowing the representee will act upon it
    1. Made knowing it is untrue
      1. Akerhielm v De Marc (1959)
    2. Made when you don't believe it's true
      1. Derry v Peek (1889)
      2. Liable for Damages + Affirmation or Rescind
        Damages
        Rescind
        Substantial restitution is possible
        CHECK
        Affirm
    3. Standard Chartered Bank v Pakistan National Shipping (No 2) (2002)
2. Negligent
  1. Made without reasonable grounds and did not believe it to be true until time of contract & Person is induced & suffered loss
    1. Damages
      1. S 2(1) MA: Attracts same liability as a fraudulent misrep
        Recission:
        Awarded damages instead S2(2) MA
        Must compare the nature of the misrep, and compare the loss that would have been caused if it were upheld, and the loss to representer if it were rescinded
        Or when contract is affirmed, lapse of time, third party rights, restoration to original impossible
        Rescind
    2. Affirm by intention of conduct
      1. Must have been aware of the misrep, and must have rights to affirm/rescind
  2. Representor owes duty of care
    1. Hedley Byrne (CL) misstament
3. Innocent
  1. Had reasonable grounds to believe it was true. S2(2) MA, innocent and negligent entitled to rescind but may award damages if it is fairer
    1. Entitled to rescind usually
      1. S 2(2) MA: Depends on court's discretion
        Depends if it is equitable: Must compare the nature of the misrep, and compare the loss that would have been caused if it were upheld, and the loss to representer if it were rescinded
        Damages are awarded in lieu of recession
Exclusion Clause
1. Only can exclude if it is a negligent or innocent
  1. Section 3 Misrep Act: Term that excludes or restricts liability for negligent or innocent can only affect remedy if it satisfies requirement of reasonableness under Section 11 of UCTA
    1. Properly incorporated
    2. Properly construed
    3. Reasonable
      1. Look @ relative knowledge of the parties
Could a representation (pre-contractual statement been a term?
1. 1,. Request to verify 2. Relative abilities of parties 3. Importance of Statement
2. Parole Evidence Rule

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Misrepresentation

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