MISREPRESENTATION
Before 1967, the remedies available for misrepresentation were limited as if a
misrepresentation was incorporated as a contractual term, the remedy of rescission for
misrepresentation was lost and parties often went to great lengths to convince courts that
statements were intended to be terms of the contract in order to secure a remedy.
Misrepresentation Act 1967 introduced more extensive remedies in damages for
misrepresentation under section 2 and section 1(a) of the Act provides that a contract may be
rescinded for misrepresentation, even if the misrepresentation is also a term of the contract.
Mere puff: a facetious statement which results in no legal consequences.
Representation: it is a statement of facts which is not included in the contract. If a
representation is not complied with then it would result in a misrepresentation claim being
initiated.
Terms of contract: it is a part of contract which if not complied with would result in breach
of contract.
Misrepresentation is defined as an ambiguous statement of fact or law which is false and
addressed to the party misled and induces the other party to enter into a contract.
House of lords held that money paid under the law could be recovered on essentially
the same as money paid under a mistake of fact [Kleinwort Benson Ltd v Lincoln
City Council (1999)].
Court held that if a party enters into a contract on mistaken belief about the law then
they may be entitled to declare the contract void or set aside [Brennan v Bolt Burden
(a firm) (2004)].
Court recognized the misrepresentation of law as a cause of action which means that
if one party misrepresents the law to another party during contract negotiations, and
the misled party relies on this misrepresentation to their detriment, they may have
grounds for legal action [Pankhania v London Borough of Hackney (2002)].
Ingredients of misrepresentation
Unambiguous
The extent of certainty is required in contractual terms for the party to make the claim
successful such as the term is sufficiently clear without any confusion.
, Turner LJ held that the statement where land was described as fertile and improvable
is considered ambiguous and unclear therefore not actionable [Dimmock v Hallett
(1886)].
The more specific the statement, the less likely it is to be treated as a mere puff
[Carlill v Carbolic Smoke Ball Co (1893)].
False
Statements are considered false when they are true but also misleading and the main
arguments are skipped such as half truths and sometimes statements are false due to change
of circumstances.
Court held that the statement including half-truth is considered false when it would
lead the reasonable person does not enquire about the details and believe on it that the
situation described would continue in the future [Dimmock v Hallet (1866)].
The statement which was true at the time it was made but becomes false due to a
subsequent change in circumstances is considered as misrepresentation if the party
who made the statement remains silent about the changed circumstances as the courts
treated the original statement as a 'continuing representation [With v O’Flanagan
(1936)]; [Spice Girls Ltd v Aprilia World Service BV (2000)].
Statement
General rule is that there is no duty on defendant to disclose the facts and silence
cannot amount to misrepresentation [Keates vs Earl of Cadogan (1851)] as this case
was based on the principle of Caveat Emptor which means that let the buyer beware.
There is no duty on seller to describe the weaknesses and defects of his product
except when the purchaser asks.
The exception to this general rule is as described as:
When a statement which was made became false as a result of change in
circumstances then keeping silence would be treated as a misrepresentation [With v
O’Flanagan (1936)]; [Spice Girls Ltd v Aprilia World Service BV (2000)].
If the relevant information related to the statement is not disclosed then it would turn
into the misrepresentation [Dimmock v Hallet (1866)].
Court held that the parties are obliged to disclose relevant information even if it is not
asked when acting in utmost good faith such as in insurance contracts, employment
Before 1967, the remedies available for misrepresentation were limited as if a
misrepresentation was incorporated as a contractual term, the remedy of rescission for
misrepresentation was lost and parties often went to great lengths to convince courts that
statements were intended to be terms of the contract in order to secure a remedy.
Misrepresentation Act 1967 introduced more extensive remedies in damages for
misrepresentation under section 2 and section 1(a) of the Act provides that a contract may be
rescinded for misrepresentation, even if the misrepresentation is also a term of the contract.
Mere puff: a facetious statement which results in no legal consequences.
Representation: it is a statement of facts which is not included in the contract. If a
representation is not complied with then it would result in a misrepresentation claim being
initiated.
Terms of contract: it is a part of contract which if not complied with would result in breach
of contract.
Misrepresentation is defined as an ambiguous statement of fact or law which is false and
addressed to the party misled and induces the other party to enter into a contract.
House of lords held that money paid under the law could be recovered on essentially
the same as money paid under a mistake of fact [Kleinwort Benson Ltd v Lincoln
City Council (1999)].
Court held that if a party enters into a contract on mistaken belief about the law then
they may be entitled to declare the contract void or set aside [Brennan v Bolt Burden
(a firm) (2004)].
Court recognized the misrepresentation of law as a cause of action which means that
if one party misrepresents the law to another party during contract negotiations, and
the misled party relies on this misrepresentation to their detriment, they may have
grounds for legal action [Pankhania v London Borough of Hackney (2002)].
Ingredients of misrepresentation
Unambiguous
The extent of certainty is required in contractual terms for the party to make the claim
successful such as the term is sufficiently clear without any confusion.
, Turner LJ held that the statement where land was described as fertile and improvable
is considered ambiguous and unclear therefore not actionable [Dimmock v Hallett
(1886)].
The more specific the statement, the less likely it is to be treated as a mere puff
[Carlill v Carbolic Smoke Ball Co (1893)].
False
Statements are considered false when they are true but also misleading and the main
arguments are skipped such as half truths and sometimes statements are false due to change
of circumstances.
Court held that the statement including half-truth is considered false when it would
lead the reasonable person does not enquire about the details and believe on it that the
situation described would continue in the future [Dimmock v Hallet (1866)].
The statement which was true at the time it was made but becomes false due to a
subsequent change in circumstances is considered as misrepresentation if the party
who made the statement remains silent about the changed circumstances as the courts
treated the original statement as a 'continuing representation [With v O’Flanagan
(1936)]; [Spice Girls Ltd v Aprilia World Service BV (2000)].
Statement
General rule is that there is no duty on defendant to disclose the facts and silence
cannot amount to misrepresentation [Keates vs Earl of Cadogan (1851)] as this case
was based on the principle of Caveat Emptor which means that let the buyer beware.
There is no duty on seller to describe the weaknesses and defects of his product
except when the purchaser asks.
The exception to this general rule is as described as:
When a statement which was made became false as a result of change in
circumstances then keeping silence would be treated as a misrepresentation [With v
O’Flanagan (1936)]; [Spice Girls Ltd v Aprilia World Service BV (2000)].
If the relevant information related to the statement is not disclosed then it would turn
into the misrepresentation [Dimmock v Hallet (1866)].
Court held that the parties are obliged to disclose relevant information even if it is not
asked when acting in utmost good faith such as in insurance contracts, employment
