Misrepresentation cases: An actionable misrepresentation is basically (1) a false statement of fact or law that (2) is relied on by the other party in entering the contract False Statement of Fact or Law A) Statement of Opinion Smith v Land and House Property Corporation (1884) 28 CA =>The case illustrates that what appears to be a statement of opinion may contain an actionable statement of fact =>Misrepresentation of Mr Fleak as "a most desirable tenant" even though he was due in rent and was then bankrupt = Held: There had been a misrepresentation relied on by the defendant =>Bowen LJ: If the facts are equally well known to both parties what one of them says to the other is nothing more but an expression of opinion =>But if the facts are not equally known to the parties then a statement of opinion by the one who knows best involves very often a statement of a material fact => These are statements on a subject that the landlord knew everything and the purchasers nothing Bisset v Wilkinson [1927] AC 177 Privy Council The claimant stated that if the plots were properly worked, they had a carrying capacity of 2000 sheep. Nevertheless, he had never used his property for sheep farming so this could only be a statement of opinion not a fact and therefore it was not actionable Factors that the courts will look into in cases of misrepresentation: i) The material facts of the transaction ii) The knowledge of the parties iii) Their relative position iv) The words of representation used v) The actual condition of the subject-matter spoken
= The defendants were not justif i ed in believing that anything said by the claimant was anything more than an expression of his opinion on the subject B) Statements of Intention Edgington v Fitzmaurice (1885) 29, CA The defendants invited shareholders to subscribe for debenture bonds in order to raise money to purchase horses and expand its business. In reality the real purpose for the money was to pay of f pressing liabilities of the company. The claimants bought some bonds based on that misrepresentation => Held: the statement of purpose in the prospectus consisted of a fraudulent misrepresentation and also the claimant had relied on that =>This was both a statement of intention and of fact => The claimant was also held entitled to damages for the tort of deceit even though he entered the contract on both misrepresentation and his own mistaken belief => Hence, misrepresentation does not need to be the sole cause C) Silence: No duty of Disclosure => Staying silent does not in itself create a misrepresentation = There is generally no obligation for a party to disclose information to the other that it is making a mistake in entering into a contract = However there is a misrepresentation when one fails to correct one's earlier representation which has been changed or falsif i ed by subsequent events
With v O'Flanagan [1936] CA Held: