Contract Law Lecture Misrepresentation 1 Misrepresentation . This refers to pre-contractual statements which induce a party to enter into a contract, but the statements turn out to be 'false' . The law here is predominantly based on common law rules, however, there is now statutory intervention in the form of the Misrepresentation Act 1967 mainly as regards remedies Issues · Definition · Basic requirements · Exceptions · Misrepresentation by action/conduct · Misrepresentation by silence · Representation must be action upon Definition A false statement of fact or law, made by one contracting party to another, which induces the other party to enter into the contract Example . During negotiations for the purchase of a house, seller tells prospective buyer that the central heating system is ‘excellent? · Subsequently, the sale is concluded, and buyer finds out the central heating system malfunctions · If buyer was induced Basic requirements . False statement must have been made by one contracting party to the other · If a person enters a contract on the basis of a misrepresentation by a third party, it will usually have no effect on the contract . However, note that liability can arise if a party makes a misrep to a third party, knowing it will be passed on to the other contracting party
One contracting party to another · The normal rule is that the false statement must have been Statement of fact or law, not intention or opinion . 'i will get the car cleaned before I deliver it to you' - intention, not fact . 'this car is one of the best in the market' - opinion, not fact · Bisset v Wilkinson (1927) o Statement as to the number of sheep a piece of grazing land would support was held to be · Opinion is contradicted by other facts known to the person giving that opinion o Smith v Land and House Prop. Corp (1884) · Opinion comes from an 'expert' o Esso Petroleum v Mardon (1976) · Opinion (or intention) is not genuinely held o Edgington v Fitzmaurice (1885) " 'the state of a man's mind is as much Statement of law · Kleinwort Benson Ltd v Lincoln City Council (1999) Mistake of law could lead to an action for restitution of money paid Principle applied to misrepresentation in: · Pankhania v Hackney LBC (2ffff2) o Purchase of a property to be used as a car park. Statement that the occupier of the car park could be evicted within three months under law. This was incorrect, and was a false statement of fact Misrepresentation by action/conduct · Spice Girls Ltd v Aprilia World Service BV (2ffffff) - The fact that the members of the Spice Girls Group took part in the filming of a commercial for Aprilia, knowing at the time that one member of the group intended to leave, as she did shortly after the Misrepresentation by silence · No general duty to disclose information - Turner v Green (1895)
· Exceptions