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Misrepresentation, What it is?, Types - Coggle Diagram
Misrepresentation
Economic Duress
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A contract may be set aside because extreme coercion has rendered the contract otherwise commercially unviable
Misrepresentation Act
Judge has discretion which remedy to apply. Recession will not therefore be available if the judge has decided that damages is more a appropriate remed
What it is?
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[1] Bisset v Wilkinson
Wilkinson was selling a farm to Bisset, he did not use the farm for sheep farming and Bisset wanted it for this purpose. Wilkinson stated his opinion that it would be able to house 2000 sheep, Bisset found it couldn't house this many sheep and sued Wilkinson, it was held that Wilkinson's statement was not misrepresentation as it was given as opinion not fact.
Full Definition
A statement of material fact [1] made by one party to another [2] during the negotiations leading up to the formation of the contract [3], which was intended to (and did) act as an inducement [4] to the other party to enter the contract but which was not intended to be a binding obligation / was untrue or incorrectly stated [5]
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[2] Peyman v Lanjani
The lawyer of the defendant persuaded the claimant to enter the contract despite the claimant being hesitant because they knew of the fraud from the other party. Normally. this inducement would have to come from the other party but the lawyer was acting as an agent on their behalf.
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Types
Negligence
A false or misleading statement of fact made during negotiations by one party to another, the contract can be rescinded and damages can be rewarded
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Three Requirements
- The two parties must be close enough that it is reasonable for them to rely on the statement
- Party to whom statement is made relies on the statement and the party making the statement is aware of that reliance
- Party making statement must know enough to give advice
Innocent
A representation that is neither fraudulent nor negligent. The remedies for misrepresentation are rescission and/or damages
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Fraudulent
Where a false representation has been made knowingly, or without belief in its truth, or recklessly as to its truth.
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