Lecture
Misrepresentation
1. Is there misrepresentation?
2. What type of misrepresentation?
3. What remedies?
Misrepresentation:
- Do we have a false and ambiguous statement? Edgington v Fitzmaurice
(1885)
- Fact/law not opinion: Bisset v Wilkinson [1927]
• Intention: Wales v Wadham [1977]
- Addressed to party misled: Brown v Raphael (1958)
- Induce: Smith v Land and House Property Corporation (1884)
- Something material/substantial
- Not a term - prior to contract
- False statement of fact or law made by one party to another, which, whilst not being a
term of the contract, induces the other party to enter the contract
- May be void, unenforceable or voidable
- Actionable misrepresentation: Voidable, giving innocent part right to rescind contract
and or claim damages
- Promise: Maker of statement accepts (or appears) obligation to do or not to do something
- Representation: Statement asserting a given state of facts is true
- Kleinwort Benson Ltd v Malaysia Mining Corp 1989
- Hierarchy:
• Promises
• Representation
• Other (puffs…)
- Warranties
• Heilbut, SYmons & Co v Buckleton 1913 AC 30
• Oscar Chess Ltd v WIlliams 1957
• Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd 1965
What is a misrepresentation?
- Unambiguous false statement of existing fact or law
- Addressed to the party misled
- Intended to be acted upon
- Material which induces making of contract
Page !1 of !12
, Lecture
Actionable Misrepresentation Requirements
- Lambert v Co-Operative Insurance Society Ltd [1975] 2 Lloyd's Rep. 485
- Dimmock v Hallett [1860] L.R. 2 Ch App 21
- Carlill v Carbolic Smoke Ball Co [1893]1 QB 256
• Misrepresentation considered
• Concluded it was a term; unilateral
- Gordon v Selico (1986) 278 EG 53
• In a contract to buy lease owned by Selico
• Flat in poor condition (dry rot)
• Painted over it, did not make a statement about it
• Gordon moved in, discovered be dry rot
• Was the act of painting amount to misrepresentation?
• HELD: Misrepresentation could be action
- Peekay Intermark v. Australia and New Zealand Banking Group [2006] EWCA Civ 386
• Term sheet reflects main terms of transaction
• Then translated to long and complex legal documents
• Investment products
• What if documents are different from term sheet?
• HELD: Terms sheet, even if incorrect, did not amount to fraudulent
misrepresentation
• People cannot be encouraged not to read the final documents
Representation must be FALSE
- Must be unambiguous false statement
- General rule:
• With v O'Flanagan [1936] Ch. 575
- When contract signed, doctor’s statement not true
- Will be a misrepresentation if statement was originally true, but was not corrected
when became false
- Seller has obligation to correct statement
- Misrepresentation Act 1967 s 2 (1) (2)
- Not well drafted, confusing
- Required for actionable misrepresentation and negligent misrepresentation
- Conlon v Simms [2006] EWHC 401-non-disclosure
• Three people working together as solicitors
• Simms being investigating
• Suspended
• Convinced Conlon and Harris he was innocent
Page !2 of !12
Misrepresentation
1. Is there misrepresentation?
2. What type of misrepresentation?
3. What remedies?
Misrepresentation:
- Do we have a false and ambiguous statement? Edgington v Fitzmaurice
(1885)
- Fact/law not opinion: Bisset v Wilkinson [1927]
• Intention: Wales v Wadham [1977]
- Addressed to party misled: Brown v Raphael (1958)
- Induce: Smith v Land and House Property Corporation (1884)
- Something material/substantial
- Not a term - prior to contract
- False statement of fact or law made by one party to another, which, whilst not being a
term of the contract, induces the other party to enter the contract
- May be void, unenforceable or voidable
- Actionable misrepresentation: Voidable, giving innocent part right to rescind contract
and or claim damages
- Promise: Maker of statement accepts (or appears) obligation to do or not to do something
- Representation: Statement asserting a given state of facts is true
- Kleinwort Benson Ltd v Malaysia Mining Corp 1989
- Hierarchy:
• Promises
• Representation
• Other (puffs…)
- Warranties
• Heilbut, SYmons & Co v Buckleton 1913 AC 30
• Oscar Chess Ltd v WIlliams 1957
• Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd 1965
What is a misrepresentation?
- Unambiguous false statement of existing fact or law
- Addressed to the party misled
- Intended to be acted upon
- Material which induces making of contract
Page !1 of !12
, Lecture
Actionable Misrepresentation Requirements
- Lambert v Co-Operative Insurance Society Ltd [1975] 2 Lloyd's Rep. 485
- Dimmock v Hallett [1860] L.R. 2 Ch App 21
- Carlill v Carbolic Smoke Ball Co [1893]1 QB 256
• Misrepresentation considered
• Concluded it was a term; unilateral
- Gordon v Selico (1986) 278 EG 53
• In a contract to buy lease owned by Selico
• Flat in poor condition (dry rot)
• Painted over it, did not make a statement about it
• Gordon moved in, discovered be dry rot
• Was the act of painting amount to misrepresentation?
• HELD: Misrepresentation could be action
- Peekay Intermark v. Australia and New Zealand Banking Group [2006] EWCA Civ 386
• Term sheet reflects main terms of transaction
• Then translated to long and complex legal documents
• Investment products
• What if documents are different from term sheet?
• HELD: Terms sheet, even if incorrect, did not amount to fraudulent
misrepresentation
• People cannot be encouraged not to read the final documents
Representation must be FALSE
- Must be unambiguous false statement
- General rule:
• With v O'Flanagan [1936] Ch. 575
- When contract signed, doctor’s statement not true
- Will be a misrepresentation if statement was originally true, but was not corrected
when became false
- Seller has obligation to correct statement
- Misrepresentation Act 1967 s 2 (1) (2)
- Not well drafted, confusing
- Required for actionable misrepresentation and negligent misrepresentation
- Conlon v Simms [2006] EWHC 401-non-disclosure
• Three people working together as solicitors
• Simms being investigating
• Suspended
• Convinced Conlon and Harris he was innocent
Page !2 of !12
