1560643
Misrepresentation
- Conditions it must
fufill
- 1. False Statement of Fact
- YES: Statement of Past or
Present Fact: Meaning
statement comes with
implication of untrue fact
- NO: Statement of Opinion
- Unless he had a reasonable
basis for his opinion eg.
Superior knowledge
- Esso Petroleum
Co. Ltd v Mardon
(1976)
- Esso Petroleum
Co. Ltd v Mardon
(1976)
- Unless he told you he
held that opinion but
he didn't
- Unless he had a reasonable
basis for his opinion eg.
Superior knowledge
- NO: Statement of Intention
- Unless he had no
intention but said he had
- Unless he had no
intention but said he had
- NO: Silence
- No duty to disclose
facts which will
affect your decision
- Unless silence
makes something
half-true
- Keeping silent
implies
statement is true
- Pilmore v Hood (!836)
- Pilmore v Hood (!836)
- There is failure to
correct a previous
statement that has
ceased to be true
before contract
- Spice Girls v Aprilia
World Service (2002)
- Spice Girls v Aprilia
World Service (2002)
- No duty to disclose
facts which will
affect your decision
- YES: Statement of Past or
Present Fact: Meaning
statement comes with
implication of untrue fact
- 2. Made by one
contracting party to
another
- Direct
addressee to
recipient
- Direct
addressee to
recipient
- 3. Induced the other party into entering it
- When is there no
inducement?
- 1. Not aware of misrep
2. Aware but know it;s
not true 3. Not
influenced
- 1. Not aware of misrep
2. Aware but know it;s
not true 3. Not
influenced
- When is there inducement?
- Materiality Test
(Objective):
Reasonable person in
the shoes of the party
be induced
- Actual Inducement
Test (Subjective):
Representee proves
that he was actually
induced even though
other might not be
- Materiality Test
(Objective):
Reasonable person in
the shoes of the party
be induced
- Does it matter if I get
induced even though I never
check?
- Generally, should not
put burden on
representee. Unless it
is reasonable and
easy to verify
- If they can easily verify the
truth, reasonable for them
to do so. If representer
makes negligent or innocent
misrep, less harsh
consequences
- If they can easily verify the
truth, reasonable for them
to do so. If representer
makes negligent or innocent
misrep, less harsh
consequences
- Generally, should not
put burden on
representee. Unless it
is reasonable and
easy to verify
- When is there no
inducement?
- 1. False Statement of Fact
- Types of
Misrepresentations
- Fraudulent
- Made
knowing the
representee
will act upon it
- Made
knowing it is
untrue
- Akerhielm v
De Marc (1959)
- Akerhielm v
De Marc (1959)
- Made when
you don't
believe it's true
- Derry v
Peek (1889)
- Liable for Damages +
Affirmation or Rescind
- Damages
- Rescind
- Substantial
restitution is possible
- CHECK
- Substantial
restitution is possible
- Affirm
- Damages
- Derry v
Peek (1889)
- Standard Chartered
Bank v Pakistan
National Shipping
(No 2) (2002)
- Made
knowing it is
untrue
- Made
knowing the
representee
will act upon it
- Negligent
- Made without reasonable
grounds and did not believe it
to be true until time of
contract & Person is induced &
suffered loss
- Damages
- 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
- 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
- Awarded damages
instead S2(2) MA
- Rescind
- Recission:
- S 2(1) MA: Attracts same liability as a
fraudulent misrep
- Affirm by
intention of
conduct
- Must have been
aware of the misrep,
and must have rights
to affirm/rescind
- Must have been
aware of the misrep,
and must have rights
to affirm/rescind
- Damages
- Representor
owes duty of
care
- Hedley Byrne (CL) misstament
- Hedley Byrne (CL) misstament
- Made without reasonable
grounds and did not believe it
to be true until time of
contract & Person is induced &
suffered loss
- Innocent
- 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
- Entitled to
rescind usually
- 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
- 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
- S 2(2) MA:
Depends on
court's discretion
- Entitled to
rescind usually
- 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
- Fraudulent
- Exclusion
Clause
- Only can exclude if it
is a negligent or
innocent
- 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
- Properly incorporated
- Properly construed
- Reasonable
- Look @ relative
knowledge of the
parties
- Look @ relative
knowledge of the
parties
- Properly incorporated
- 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
- Only can exclude if it
is a negligent or
innocent
- Could a representation
(pre-contractual statement been
a term?
- 1,. Request to verify 2. Relative
abilities of parties 3. Importance
of Statement
- Parole Evidence Rule
- 1,. Request to verify 2. Relative
abilities of parties 3. Importance
of Statement
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