misrepresentation

definition

a false stateemnt of existing ftca made by one aprty to antoher which induces the representee to enter into the contract

key case

dadourian group international inc v simms

2 - is it a representaiton or a term

look at the improtancce attached - couchman v hill

special knowledge or skill -dick bentley v harold smith motors

routledve mckay

whether it is incoorporated intoa written contract

schwael v raiede - reassurance given

3 - is it a statement

includes express word

curtis chemical cleaning and dyeing co

The claimant took her wedding dress to the cleaners. She was asked to sign a form. She asked the assistant what she was signing and the assistant told her that it excluded liability for any damage to the beads. The form in fact contained a clause excluding all liability for any damage howsoever caused. The dress was returned badly stained.



Held:The assistant had misrepresented the effect of the clause and therefore could not rely on the clause in the form even though the claimant had signed it.

also includes condcy

spice girls v aprillia

spice girls v aprillia

Misrepresentation can be made by conduct - misrepresented that theyd stay together

Gordon v Sellico (1986)
misrpresentation by conduct

sellco owned a flat and it was not in good contitdition. selico painted over the rot insicede the house to hide it. A person bought the flat believing it to be okay, but said there had been misrepresentation when discovering the truth


]The court said that the painting over the rot was an unequivocal statement of fact; so there was misrepresentation by the act of painting<




sttaement of statutory provision

traditionally incapable of being a misrepresentation because the law is accessible to both parties - beattie v lord eburry

Edgington v Fitzmaurice

Directors of a company (Ds) released a fraudulent prospectus for a bond issue, which stated that the proceeds would be used to building alterations and business expansion when the true purpose was to pay off company debt

C purchased the bonds partly under the the mistaken impression that he would be granted security and it was admitted that he would have purchased had he thought otherwise

When the company went into liquidation, C sued under the tort of deceit for damages

Held (Court of Appeal)
c was entitled to damages for the toryt of deciet - the prospectus contained a fraudlent misrepresentaiton

see also andre v michel

if the representor does not believe in the statement of alw when makes it, it amounts to a fraudlent misrepresentation




4 - is it unambiguos

the statement must be unamnigously false

dimmock v hallet

In selling some farm land, the defendant told the claimant that all of the farms were under tenancy, which was factually true

The defendant failed to mention that all of the tenants had given notice to vacate their land

Misleading to omit such vital information where the reason for the question was clearUnambiguous, False Statement, Fact




McInerny v Lloyds Bank (1974)

irg the tstaetement is true but the representee interprets it in a different way,, then claim will fail




5) does the principle of utmost good faith apply

lambert v cooperative insurance society

lambert v cooperative insurance society

if such a duty exisst but no disclosure is made, non disclosure amounts to misatteemnt




if such a duty exisst but no disclosure is made, non disclosure amounts to misatteemnt




6) is it a half truth

Nottingham Patent Brick and Tile Butler




Nottingham Patent Brick and Tile Butler




Butler wished to sell land (which could not be used as a brickyard)

p enquireed whetehr any restrictiev covenants

• Solicitor stated not aware, but did not reveal he had not inspected relevant documents

• Held: Misrepresentation - entitled to rescind




dimmock v hallet

Estate for sale - one farm described as let to a tenant £290 per year.


• Omitted to state that the tenant had only paid £1 for three months and had left the farm.



• Held: Misrepresentation - literally true but misleading.




7) was there a change in circumstances 0 with v o f llanagan

with v o fllanangan

• GP selling practice - stated worth £2,000 p.a.



• Fell ill, by the time of contract income fallen



• Misrepresentation - change in facts should have been revealed




8 - is it a statement of fact

bisset v wilkinson

facts

Farm owner stated to a prospective purchaser he believed the farm would hold 2,000

sheep

• Held: Merely a statement of opinion

If the statement maker is in a better position to know the truth, the false statement may be a

smith v land and house property corp




stated that the property was let to a most desirable tenant




8) is it a statement of intention

Edgington v FIrzmaurice




facts

companyn prospectus falsely stated money would be used to expand business.

• Actual intention - pay off company debts.

• Held: statement was a misrepresentation.

• BOWEN L.J.: "The state of a man's mind is as much a fact as the state of his digestion.

It is true that it is very difficult to prove what the state of a man's mind at a particular time

is, but, if it can be ascertained, it is as much a fact as anything else

9) the statement must have INDUCED the contract

False statement of no effect if claimant never knew of its existence:







Horsfall v Thomas

facts

Contract for the sale of a defective gun

• The vendor had actively concealed a defect in the gun

• However, the buyer had not inspected the gun prior to purchase

• Held: the misrepresentation did not induce the contract

There is no misrepresentation if the other party did not allow it to affect his judgment

Attwood v Small (1838)




• Seller of a mine had exaggerated earning capacity


• Purchaser sent his own agent to make a report (similar to vendor)


• Held: purchaser did not rely on the statement




FINALLY, the claiamnt knew or believed that the misrepresentation was false

But note: the mere opportunity to discover the truth does not prevent it being a misrepresentation

Redgrave v Hurd

Redgrave told Hurd solicitor practice worth £300 per year. Hurd given opportunity to examine accounts but did not do so, held that there was a misrepresentation even though there was an opportunity to dsichover the tryth

decide on categorty of msirepresetntation - fraudlent innocent or negligent