Casebook ch. 14: Misrepresentation
Section 1: Actionable Misrepresentation
An unambiguous false statement of fact that induces the other party to enter the
contract
I) Conduct:
Statement of fact can include a conduct as a misrep.
Gordon v Selico Co., 1986
State agents instructed independent contractor to work on their flats
Contractor (def.) covered up rotten things in flats to get work done faster
Claimants saw flat and didn’t see rot and then purchased it
Held: CA agreed that this conduct was a fraudulent misrep. Since def. relied on flat
being on good shape, would have changed their mind of they saw rot
Spice Girls Ltd v Aprilia World Service BV, 2002
See facts in notes
Held: their conduct did nothing to show that one girl would be leaving which is
misrep. For the advertising company as they rely on that girl for the campaign
Knew of girl leaving
II) Silence:
Does silence amount to a misrep.? No, it does not generally.
Keates v The Earl of Cadogan, 1851
Def. leased a house to plaintiffs, knowing they wanted immediate occupation but
failed to tell plaintiff house was not habitable
Held: general rule that person has no duty to disclose in contract law
Jervis CJ: deceit in this case since def. knew of immediate occupation not being
possible, but still no misrep.
III) Half -truths:
Usually amount to misrep.
Dimmock v Hallett, 1866
Land was up for sale but def. failed to disclose that tenants of farm handed in notice
to quit, making it seem like it was desirable
Held: amounted to misrep. as failed to disclose the whole truth which is relied upon
in this case
If circumstances change:
With v O’Flanagan, 1936
Def. sold medical practice with promise it would make 2000 pounds per year
Was true at beginning but by time contract was signed, value dropped to 300 or so
This was failed to be disclosed
Held: misrepresentation was continuing throughout contract, important to know this
fact, sought rescission of contract
Once info became false, amounted to a misrep. (duty to disclose)
Romer LJ: fair principle of equity to inform other party if statement becomes false
Wales v Wadham, 1977
Husband promised wife a divorce settlement of 13.000 pounds, only if she would not
remarry
Section 1: Actionable Misrepresentation
An unambiguous false statement of fact that induces the other party to enter the
contract
I) Conduct:
Statement of fact can include a conduct as a misrep.
Gordon v Selico Co., 1986
State agents instructed independent contractor to work on their flats
Contractor (def.) covered up rotten things in flats to get work done faster
Claimants saw flat and didn’t see rot and then purchased it
Held: CA agreed that this conduct was a fraudulent misrep. Since def. relied on flat
being on good shape, would have changed their mind of they saw rot
Spice Girls Ltd v Aprilia World Service BV, 2002
See facts in notes
Held: their conduct did nothing to show that one girl would be leaving which is
misrep. For the advertising company as they rely on that girl for the campaign
Knew of girl leaving
II) Silence:
Does silence amount to a misrep.? No, it does not generally.
Keates v The Earl of Cadogan, 1851
Def. leased a house to plaintiffs, knowing they wanted immediate occupation but
failed to tell plaintiff house was not habitable
Held: general rule that person has no duty to disclose in contract law
Jervis CJ: deceit in this case since def. knew of immediate occupation not being
possible, but still no misrep.
III) Half -truths:
Usually amount to misrep.
Dimmock v Hallett, 1866
Land was up for sale but def. failed to disclose that tenants of farm handed in notice
to quit, making it seem like it was desirable
Held: amounted to misrep. as failed to disclose the whole truth which is relied upon
in this case
If circumstances change:
With v O’Flanagan, 1936
Def. sold medical practice with promise it would make 2000 pounds per year
Was true at beginning but by time contract was signed, value dropped to 300 or so
This was failed to be disclosed
Held: misrepresentation was continuing throughout contract, important to know this
fact, sought rescission of contract
Once info became false, amounted to a misrep. (duty to disclose)
Romer LJ: fair principle of equity to inform other party if statement becomes false
Wales v Wadham, 1977
Husband promised wife a divorce settlement of 13.000 pounds, only if she would not
remarry
