Misrepresentation Cambridge Law Tripos: Law of Contract, Michaelmas 2018 Dr Jonathan Morgan, Corpus Christi College Misrepresentation, non-disclosure and mistake. Possible responses: (i) No contract ever came into existence / the contract is "void". (ii) The contract is "voidable", via rescission. (iii) The contract should be rewritten to correct the mistake ("rectification"). (iv) Damages should be awarded to remedy the wrong - instead of affecting validity of contract, can award damages to disappointed party a. To remedy "the wrong" - is there anything wrongful about party that doesn't correct a mistake made by the other (assume it's a unilateral mistake) - types of steps a legal system might take. Statements made in negotiations: the remedy depends on the classification of the statement and the mental state with which it was made. Two broad categories: Contractual (a "warranty")-damages for breach of contract; and (possibly) termination for breach (depending on the nature of the term). - Statement made in negotiation can be treated as having contractual effect, as often put as a contractual warranty o If untrue, or breached, you can get damages on contractual measure for breach and may also be able to get termination of this is a sufficiently serious breach Misrepresentation-rescission (subject to any "bars"); and (possibly) damages in tort or under the Misrepresentation Act 19ffi7 (dependent on fault of representor) - Effect rather different - can have recission of contract (declare it to be void from the outset) and be able to get damages but not damages for breach of contract but tort-type damages either at common law or under the Misrepresentation Act But these damages claims depend on showing fault on the part of the representor Same statement could be contractual or misrepresentation, and consequences of that are very different remedies.
- Same statement might be BOTH a term of contract and misrep, so NOT mutually exclusive. o Some remedies mutually exclusive Development: Avon Insurance v. Swire Fraser [2000] 1 All E.R. (Comm) 573, [19] (Rix ]): The law of misrepresentation has developed in fits and starts. At one time a misrepresentation (outside contractual or fiduciary relationships) only granted a remedy in two situations: a pre- contractual misrepresentation could be a ground for avoiding a contract; and a remedy in damages was available in the tort of deceit but only of course if there was fraud. No damages were available for an innocent misrepresentation, not even if it was a negligent one. Then in 19ffi3 in Hedley Byrne & Co Ltd v. Heller & Partners Ltd [19ffi4] AC 4ffi5 the House of Lords made it plain that a duty of care to avoid negligent misstatements could arise between persons in a special relationship and breach of that duty could found recovery in damages. Only a few years later in 19ffi7 the Misrepresentation Act extended a right to damages under s. 2(1) in the case of any misrepresentation inducing a contract made by one party to another party to it where the representor is unable to prove absence of