Misrepresentation 1 Misrepresentation This is concerned with pre-contractual statements which induce a party to enter into a contract, but turn out to be false. The law here is predominantly based on common law rules, however, there is statutory intervention via the Misrepresentation Act 1967 mainly as regards remedies. 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. Basic Requirements False statement must have been made by one contracting party to the other. It must be a statement of fact or law, not intention or opinion. The statement must have induced the other party to enter into the contract. Contracting party to another Subject to minor exceptions (e.g Barclays Bank v O'Brien), a misrepresentation by a 3rd party will have no effect on the contract. The false statement must have been made by, or on behalf of, a contracting party. 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) Statement as to the number of sheep a piece of grazing land would support was opinion. 3 Exceptions Opinion is contradicted by other facts known to the person giving it Smith v Land and House Prop. Corp (1884) Opinion comes from an "expert" Esso Petroleum v Mardon (1976) Opinion (or intention) is not genuinely held C Edgington v Fitzmaurice (1885) . "the state of a man's mind is as much a fact as the state of his digestion ... "- Bowen LJ Statements 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 (2002) Misrepresentation by Action/Conduct Spice Girls Ltd v Aprilia World Service BV (2000)- The fact that 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 contract had been signed, amounted to misrepresentation by conduct. Misrepresentation by Silence
No general duty to disclose information Exceptions: C Only half the story told - Dimmock v Hallett (1866) Situation has changed - With v O'Flanagan (1936) Contracts uberrimae fidei (utmost good faith) - e.g insurance contracts - Lambert v Co-operative Insurance (1975); Woolcutt v Sun Alliance and London Insurance Ltd (1978) Misrepresentation must induce the contract Edgington v Fitzmaurice - But it need not be the only factor influencing the claimant. Failing to make inquiries will not prevent a claim - Redgrave v Hurd (1881) But the false statement must not be contradicted by contractual documents signed by claimant - Peekay Intermark Ltd v Australia and New Zealand Banking Group Ltd (2006) Reliance does not have to be "reasonable" - Museprime Properties v Adhill