Contract - Misrepresentation - Problem Question

Contract - Misrepresentation - Problem Question

1. Unambiguous

   • False
     • Statement of fact or law
       • intended for the party misled
         • induced them to contract
           • The cause of the loss
             • Is the misrepresentation fraudulent, negligent or innocent?
               • Or a negligent misstatement?
               • Fraudulent misrepresentation – action under tort of deceit
                 • Cons: a high bar of proof – claimant must prove the mental state of defendant, and that fraud is the only possible interpretation, Claimant must prove.
                 • Pros: investigation irrelevant (Pearson and Dublin); once proven, motive irrelevant (dairy and Peak); maximum remedies available.
               • Negligent misrepresentation – action under misrepresentation act 1967
                 • When bringing a claim for fraudulent misrepresentation, always bring a claim for negligence misrepresentation in the alternative.
                 • Pros: easier claim – once inducement and loss causation are shown, it falls to the representor to prove reasonable belief almost the same remedies as fraudulent misrepresentation.
                   • Howard Marine and Ogden – the bar of "reasonable belief" is quite high.
                 • Cons: there must be a contract between the parties. If there is no contract, you must sue under the tort of deceit (fraudulent misrepresentation), or the tort of negligence statement.
               • Innocent misrepresentation – action under misrepresentation act 1967
                 • The limited remedies available mean that, in practice, courts often prefer to regard innocent misrepresentation as either a term of the contract, or as a collateral contract.
               • Remedies
                 • Rescission – The first port of call for all claims is recision. Precision in claims of miss representation aim to put the parties back into the state they were before the contract– Both prospective and retrospective. This can be distinguished from recision for breach of contract, which is only perspective.
                   • Damages – in addition, the parties may wish to claim damages. This is not available for innocent misrepresentation. Damages are much broader, and can include all losses, Flowing from the misrepresentation.
                     • Indemnity – this involves reimbursing the representative for losses incurred in relation to third-party is. It is available in addition to recision, where damages are otherwise unavailable.
                   • Damages in lieu of precision – this is available under section 2 brackets two), where precision is possible. This is particularly important for claims of any claims of innocent misrepresentation. Where damages would not be otherwise available.
       • CONDUCT can be a statement of fact
         • Spice Girls v Aprilia
         • Gordon v Selico
       • OPINION is not a statment of fact
         • GENERAL RULE: A layperson's opinion is not a statement of fact (Bisset v Wilkinson)
           • EXCEPTION 1: If the representor has greater knowledge of the facts, it may be construed as a statement of fact (Smith v Land and House Property)
             • EXCEPTION 2: If the representor has greater SKILL than the representee, it may be construed as a statement of fact (Esso v Marden).
       • Klienwort Benson v Malaysia Mining Corp - a statement asserting a given state of affairs
       • Pankhania v Hackney - can be a statement of LAW.
       • FUTURE INTENTION is not a statement of fact
         • GENERAL RULE: Beattie v Ebury
           • No duty to inform the other party of a CHANGE OF INTENTION (Wales v Wadham)
             • EXCEPTION: a dishonest statement of intention is a statement of fact because you're lying about the fact of your mental state (Edgington v Fitzmaurice)
       • SILENCE is not a statement of fact
         • GENERAL RULE: No general duty to disclose information.
     • Avon Insurance v Swire Fraser - representation may be true if it is SUBSTANTIALLY CORRECT.
   • McInerny v Lloyds Bank