Available for fraudulent, negligent and innocent misrepresentation. Note, in certain circumstances, the court has a discretion under Sec 2(2) Misrepresentation Act 1967 to award damages in lieu of rescission for an innocent misrepresentation. A contract is not automatically rescinded because of a misrepresentation. The contract is 'voidable' and not 'void'. The choice as to rescind or not rests with the aggrieved party. Until that choice is made, the contract remains valid and enforceable. To rescind, the aggrieved party is expected to give notice to the other party-but note Car and Universal Finance Co Ltd v Caldwell (1965). But, the right to rescission is lost by: Affirmation - Long v Lloyd (1958); Peyman v Lanjani (1985) Lapse of time - Leaf v International Galleries (1950); Salt v Stratstone Specialist Ltd (2015) Impossibility of restitution - Clarke v Dickson (1858) Rights of third parties affected - Car and Universal Finance Co Ltd v Caldwell(1965) } Available where the statement is made Fraudulently - tort of deceit - Derry v Peek (1889); Smith New Court Ltd v Scrimgeour Vickers (Asset Management Ltd (1997) >Knowing it is false Reckless disregard for the truth } Negligent misstatements-under the tort of negligence, using the Hedley Byrne v Heller (1964) principles Not available for innocent (non-negligent) misrepresentation. Operates alongside rescission. Allows recovery for necessary expenses which are directly related to obligations arising from the contract. Whittington v Seale-Hayne (1900) The claim for indemnity is quite limited in scope. Misrepresentation Act 1967 } s 2(1) - } damages are awarded where that would have been available if the statement was fraudulent Liability is found unless defendant proves reasonable grounds for believing statement was true - Howard Marine Dredging v Ogden (1978) Measure of damages - same as for tort of deceit - Royscot Trust v Rogerson (1991) } s 2(2)- Damages may be awarded in lieu of rescission Williams Sindall Plc v Cambridgeshire County Council (1994) Witter (Thomas) Ltd v TBP Industries Ltd (1996) Govt of Zanzibar v British Aerospace (Lancaster House) Ltd (2000)- Judge Jack QC- where the contract cannot be rescinded, section 2(2) damages are unavailable Salt v Stratstone Specialist Ltd (2015)- the words 'in lieu of rescission' ... carry with them the implication that rescission is available ...
As amended by the Consumer Protection (Amendment) Regulations 2014- section 2(4) has been added to the Misrepresentation Act 1967- provides that section 2 does not entitle a person to be paid damages in respect of a misrepresentation if the person has a right to redress under Part 4A of the Consumer Protection from Unfair Trading Regulations 2008 ... } section 3 Misrepresentation Act 1967 as amended by section 8 Unfair Contract Terms Act (UCTA) 1977 restricts the possibility of excluding liability for misrepresentation. Such an exclusion by way of a contract term shall have no effect except it satisfies the requirement of reasonableness under the UCTA 1977- Walker v Boyle (1982); Llyod v Browning (2013) section 3 of the Misrepresentation Act will no longer apply to consumer