1. Describe the various remedies open to a party who is induced to enter
into a contract by the misrepresentation of the other party.
compensation, recission, damages
common law remedies
fraudulent = damages [can claim all of them, including
unforeseeable ones] and/or recission – at common law – need to
use tort of deceit [because no contract, statement made before
contract]
negligent = damages and/or recission – tort of negligence but
only foreseeable damages
innocent = recission – not damages because there is no wrong
done, party is innocent and has reasonable grounds to be
statement is true [cannot punish party because nothing
statutory remedies
section 2(1) = fraudulent and negligence – foreseeable and
unforeseeable, highest level of damages that you can get – this
section contains ‘fiction of fraud’ – treats it as fraud, even If its
not
depends what misrepresentor can prove
section 2(2) = innocent, recission is available but cannot get
rescission and damages
only if court finds it is equitable to reward damages
William v Cambridge country council = case about purchase of
place of land from w from cc – neither parties knew of sewage on
land, which was problematic
after sale – land which was bought for £5m – dropped
significantly – w thinking of way to get out of contract
found sewer and claimed it was misrepresentation –
misrepresentation would have been innocent
small misrep
compared loss – if contract upheld then keep land and only costs
£18k to fix sewer but recission contract would cost much more
requirement = nature of misrepresentation [is it big/small], loss
that will be cause if contract continues and loss that will be cause
if contract recission – whichever loss is smaller than courts go
with that option [less economically harmful situation]
fraudulent = under statutory s2(1) and common law
misrepresenting party know it is lying
damages and/or recission [remedies]
into a contract by the misrepresentation of the other party.
compensation, recission, damages
common law remedies
fraudulent = damages [can claim all of them, including
unforeseeable ones] and/or recission – at common law – need to
use tort of deceit [because no contract, statement made before
contract]
negligent = damages and/or recission – tort of negligence but
only foreseeable damages
innocent = recission – not damages because there is no wrong
done, party is innocent and has reasonable grounds to be
statement is true [cannot punish party because nothing
statutory remedies
section 2(1) = fraudulent and negligence – foreseeable and
unforeseeable, highest level of damages that you can get – this
section contains ‘fiction of fraud’ – treats it as fraud, even If its
not
depends what misrepresentor can prove
section 2(2) = innocent, recission is available but cannot get
rescission and damages
only if court finds it is equitable to reward damages
William v Cambridge country council = case about purchase of
place of land from w from cc – neither parties knew of sewage on
land, which was problematic
after sale – land which was bought for £5m – dropped
significantly – w thinking of way to get out of contract
found sewer and claimed it was misrepresentation –
misrepresentation would have been innocent
small misrep
compared loss – if contract upheld then keep land and only costs
£18k to fix sewer but recission contract would cost much more
requirement = nature of misrepresentation [is it big/small], loss
that will be cause if contract continues and loss that will be cause
if contract recission – whichever loss is smaller than courts go
with that option [less economically harmful situation]
fraudulent = under statutory s2(1) and common law
misrepresenting party know it is lying
damages and/or recission [remedies]
