Misrepresentation
If a representation turns out to be untrue, the claimant should consider making a claim for
misrepresentation. An actionable misrepresentation renders the contract VOIDABLE (Party
decides whether to end contract).
Definition Of Misrepresentation
An untrue statement of fact addressed by one party to the other before, or at the
time, the contract is made which is one of the factors that induces the formation of
the contract.
To claim for Misrepresentation, Claimant must establish the following:
The defendant made a false statement of fact:
It was addressed to the claimant;
Before or at the time the contract was formed;
It induced the claimant to enter the contract
False Statements Of Fact
Important to distinguish a false statement of fact from other types of statements. Only
statements of fact can give rise to a misrepresentation.
Fact Not Opinion:
The General Rule is that a statement of opinion cannot give rise to a
misrepresentation.
In some circumstances, where the statement maker is an expert, or the opinion could
not honestly be held in light of knowledge or position of the statement maker, a
statement of opinion may be regarded as one of fact.
o Bisset v Wilkinson (1927) – Statement was made that the land would
support 2000 sheep. This was an expression of opinion because the seller
was not in any better position to know than the purchaser.
o Hummingbird Motors v Hobbs (1986) – Statement about the mileage of a
second-hand car was not treated as a statement of fact because it was
, qualified as being correct ‘to the best of my knowledge and belief’. Once
again, seller was in no better position than the purchaser.
o Smith v Land and House Property Corporation (1884) - Opinion that hotel
was let to ‘a most desirable tenant’ failed to mention the fact that the tenant
was bankrupt and being chased for arrears. This gave rise to
misrepresentation because the seller knew that tenant was bankrupt.
Fact Not Intention:
Statement of future intention will not give rise to a misrepresentation.
If it can be ascertained, the person’s state of mind/intention constitutes a fact.
If a person says they intend to use money for a particular purpose when they actually
use it for something different, this will be misrepresentation.
o Edgington v Fitzmaurice (1885) – Prospectus declared that funds
subscribed would be used for further development when it was really to pay
off debts. Company knowingly told a lie to induce people to invest.
o Inntrepeneur Pub v Sweeney (2002) – Statement made by the landlord that
the tenant would be released from a beer tie in March was not a statement of
fact. It was a statement of future intention (honestly held) and was based on
good grounds in line with the defendants current policy.
Impact of Silence:
The General Rule is that silence or non-disclosure does not give rise to an
actionable misrepresentation, even if the silent party knows that the other party has
misunderstood.
o Fletcher v Krell (1873)
o Turner v Green (1895) – Negotiations between parties. Turner’s solicitor
struck however the solicitor didn’t say that the other party would be at a
disadvantage. No misrepresentation so silence was okay.
4 Important Exceptions to Silence:
Change Of Circumstances
o With v O’Flanagan (1936) - D was selling medical practice, worth £200 per
year which is true. Gets ill, turnover falls and never disclosed this. Gave rise
to misrepresentation.
o Spice Girls v Aprilia World Service (2000) - Before sponsorship was
fulfilled and all members were there. Agreement was signed but later
If a representation turns out to be untrue, the claimant should consider making a claim for
misrepresentation. An actionable misrepresentation renders the contract VOIDABLE (Party
decides whether to end contract).
Definition Of Misrepresentation
An untrue statement of fact addressed by one party to the other before, or at the
time, the contract is made which is one of the factors that induces the formation of
the contract.
To claim for Misrepresentation, Claimant must establish the following:
The defendant made a false statement of fact:
It was addressed to the claimant;
Before or at the time the contract was formed;
It induced the claimant to enter the contract
False Statements Of Fact
Important to distinguish a false statement of fact from other types of statements. Only
statements of fact can give rise to a misrepresentation.
Fact Not Opinion:
The General Rule is that a statement of opinion cannot give rise to a
misrepresentation.
In some circumstances, where the statement maker is an expert, or the opinion could
not honestly be held in light of knowledge or position of the statement maker, a
statement of opinion may be regarded as one of fact.
o Bisset v Wilkinson (1927) – Statement was made that the land would
support 2000 sheep. This was an expression of opinion because the seller
was not in any better position to know than the purchaser.
o Hummingbird Motors v Hobbs (1986) – Statement about the mileage of a
second-hand car was not treated as a statement of fact because it was
, qualified as being correct ‘to the best of my knowledge and belief’. Once
again, seller was in no better position than the purchaser.
o Smith v Land and House Property Corporation (1884) - Opinion that hotel
was let to ‘a most desirable tenant’ failed to mention the fact that the tenant
was bankrupt and being chased for arrears. This gave rise to
misrepresentation because the seller knew that tenant was bankrupt.
Fact Not Intention:
Statement of future intention will not give rise to a misrepresentation.
If it can be ascertained, the person’s state of mind/intention constitutes a fact.
If a person says they intend to use money for a particular purpose when they actually
use it for something different, this will be misrepresentation.
o Edgington v Fitzmaurice (1885) – Prospectus declared that funds
subscribed would be used for further development when it was really to pay
off debts. Company knowingly told a lie to induce people to invest.
o Inntrepeneur Pub v Sweeney (2002) – Statement made by the landlord that
the tenant would be released from a beer tie in March was not a statement of
fact. It was a statement of future intention (honestly held) and was based on
good grounds in line with the defendants current policy.
Impact of Silence:
The General Rule is that silence or non-disclosure does not give rise to an
actionable misrepresentation, even if the silent party knows that the other party has
misunderstood.
o Fletcher v Krell (1873)
o Turner v Green (1895) – Negotiations between parties. Turner’s solicitor
struck however the solicitor didn’t say that the other party would be at a
disadvantage. No misrepresentation so silence was okay.
4 Important Exceptions to Silence:
Change Of Circumstances
o With v O’Flanagan (1936) - D was selling medical practice, worth £200 per
year which is true. Gets ill, turnover falls and never disclosed this. Gave rise
to misrepresentation.
o Spice Girls v Aprilia World Service (2000) - Before sponsorship was
fulfilled and all members were there. Agreement was signed but later
