6837197
Description
Flashcards by Ahmed Mirshan, updated more than 1 year ago
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Created by Ahmed Mirshan
over 7 years ago
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| Question | Answer |
| What are the vitiating factors of a contract? | Vitiating factors are - Misrepresentation - Mistake - Duress/Economic Influence - Undue Influence -Illegality |
| What is the effect of vitiating factors on a contract? | Vitiating factors and illegality render a contract VOID or VOIDABLE |
| in what ways does the law recognise the need for vitiating factors? | To counter the issue raised in contracts that are made without true consent (no offer and acceptance), contracts with misrepresentation and contracts with mistakes, economic duress and undue influence |
| what is the remedy offered by recognising vitiating factors? | vitiating factors seek to take the parties back to the position they were in BEFORE THE CONTRACT WAS MADE. (a TORTIOUS response).....also known as RESCISSION |
| what is the difference between VOID contracts and VOIDABLE contracts? | a vontract that is VOID is a contract that never happened (void ab initio). there is no transaction, and third parties cannot claim any rights under it as well as no need for rescission. a VOIDABLE contract is a valid contract till IP discovers voidable factor. IP can rescind the contract and a third party can accrue rights |
| How to establish and actionable Misrepresentation | two tests: 1. has there been a false statement of existing material fact, made pre-contractually? 2. Was it capable of inducing the representee and did it induce the representee? |
| What is a false statement? | A statement is false if it is not substantially correct. the statement will be viewed objectively through eyes of representee. |
| What are the general principles of misrepresentation? | 1. Where the buyer is informed properly of the conditions of the purchase without anything hidden then there is no claim for misrepresentation (caveat emptor) 2. Seller remaining silent cannot be held as misrepresentation (some exceptions apply) |
| What statements expressed cannot be held as an actionable misrepresentation? | Statement of Facts should be distinguished from a. mere puffs/adv gimmicks "Best in town" b. statements of opinion/beliefs c. statement of law d. statement of intention |
| When will a statement of opinion as opposed to a statement be a statement of FACT? | where the statements made are just mere puffs or is vague with no basis eg: Dimmock v Hallett "fertile and improvable" Scott v Hanson "uncommonly rich water meadowland' |
| When will a statement of opinion be a statement of FACT ? | where there is expert knowledge of the representer eg. Bisset v Wilkinson Smith v Land & House Property Corp Esso v Mardon |
| What happens when Law is applied incorrectly in a contract? | Incorrect application of law will be treated as a statement of fact see: Andre & Cie v Michel Blanc (foreign law) Pankhania v Hackney LBC |
| What factors must be considered to establish Statement of FACTS? | the statement must be a. clear, not vague b. representer must have some expertise c. must take ownership of what is being said d. must be existing rather than a future act |
| When can silence amount to a misrepresentation of fact? | When there is; A. implied misrepresentation Bodger v Nicholls B. by conduct Gordon v Selico Spice Girls v Aprilla C. half-truths Dimmock v Hallett Atlantic Estates v Ezekiel D. a change of circumstances after statement O'Flanagan Spice Girls |
| All the statements made by the representer must be false to induce the representee to enter into the contract | NO. Only ONE statement needs to be false as long as the statement is a subdstantial part of the inducement and real eg. Edington v Fitzmaurice |
| What are the types of Misrepresentation? | 1. Fraudulent 2. Negligent 3. Misrep under s.2(1) of MA 1967 4. Innocent Misrep S.2(1) MA |
| Under Fraudulent Misrepresentation the burden of Proof lies on the defendent? (TRUE or FALSE) | False: Under fraudulent misrepresentation, the Burdon of proof lies on the CLAIMANT |
| What is the test for fraudulent misrepresentation? | Subjective test under Derry v Peek |
| How are damages of fraudulent misrepresentation assessed? | Damages for fraudulent misrepresentation is assessed via TORT of Deceit Doyle v Olby & Smith New Court v Scrimgeour |
| What is the key case in which Subjective Test in FM was introduced? | Derry v Peek Lord Herschell: False statement needs to be made; i. Knowingly; or ii. without belief in its truth; or iii. recklessly, careless whether it be true or false |
| Negligent Misrepresentation requires a 'special relationship' between the parties and a contract between them. (TRUE or FALSE) | FALSE: Negligent misrepresentation requires a special relationship between the parties forming a 'duty of care' between them, but there is no need for a contract |
| Who holds the burden of proof in neglignet misrepresentation? | The Burden of proof in negligent misrep is on the claimant to prove. |
| How are damages assessed in Negligent misrepresentation? | Damages are assessed in Tort of Negligence |
| In what case was Negligent misrepresentation established? | Hedley Bryne v Heller Case involved a bank negligently giving advice (false statement) to its client, resulting in financial loss for its client. Held: (i) where there is a ‘special relationship’; and (ii) representor (bank) owes a duty of care to repesentee(customer); and (iii) Losses follow misrep (important for assessment of damages) THEN innocent party entitled to rescission and damages in respect of foreseeable losses (which is consistent with assessment of damages in tort of negligence) |
| What are the difference between statutory negligent misrepresentation under s.2(1) of misrepresentation act 1967 and common law negligent misrepresentation? | The burden of proof lies on the defendant to prove misrep was not his fault, there must be an existing contract between the parties and there is not need for special relationship |
| Why is it easier to claim for misrepresentation under s.2(1) of the MA 1967? (‘negligent’ misrep) than fraudulent misrep? | Becuase under common law misrep (fraudulent misrep) the claimants has the burden of proof to prove the misrepresentation which is difficult to address as the defendant can manipulate the evidence that can prove misrep. |
| Why does s.2(1) misrep appear to be just as beneficial to the IP as fraudulent misrep? | Under s.2(1), if a contract is concluded as a result of misrepresentation and the claimant suffers losses then the representor will be held liable for damages as though he has fraudulently made the misrepresentation even if he did not. This presumption will stand unless the representor can prove that he had reasonable grounds to believe that the statement made by him was true. This shows a reversal in the burden of proof. It mitigates the major problem faced by most claimants under the common law misrepresentation, mainly their inability to discharge their burden of proof. It forced them to step down to a lower level of claim in terms of damages granted, starting from fraudulent misrepresentation then to negligent misrepresentation and lastly to innocent misrepresentation. |
| Why would an IP chose to use negligent misstatement over s.2(1) | s.2(2) of the Act only applies if the burden of proof is discharged under s.2(1). An action under s.2(2) is similar to an action for negligent misrepresentation. The damages granted here are based on reliance measure. However, different interpretation has been given to whether under s.2(2) the right to damages is dependent upon the right to rescind the contract |
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