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Misrepresentation

In: Other Topics

Submitted By toonniia
Words 1189
Pages 5
* Is there a misrepresentation? * What kind of misrepresentation is it? * What remedies are available?

State
Misrepresentation occurs when the party makes a false statement. There are 3 types of misrepresentation, fraudulent, Negligent and Innocent. Fraudulent is where the statement has been knowing made falsely, negligent is when the statement was made without reasonable belief and a special relationship was present as said under the misrepresentation act and Hedley Byrne. Innocent misrepresentation is where the party making the statement honestly believes it to be true. For a misrepresentation to have been made it must contain 6 elements: 1. Statement of material fact as in Bisset v Wilkinson where an estimation was given and as was just a mere opinion did not count as a misrepresentation. 2. Cannot be made by a 3rd party as in the case of Peyman. 3. Must not have been made after the contract was formed as in the case of Roscorla v Thomas where the promise was not made before the contract was agreed to. 4. Must have induced the contract unlike in the case of JEB fasteners in which the accounts would not have induced the contract as they were not fundamental. 5. The statement must have been false 6. The statement must not have intended to be legally binding as in couchman v hill in which the cow’s pregnancy did not lead to misrepresentation.

However there are other elements that will determine if a misrepresentation was made or not. In fiduciary contracts the party’s must disclose all the facts and not just half-truths. If specialist knowledge is relied upon then failing to give all the facts will lead to a misrepresentation as in the case of Esso v Marden. If any of these take place then misrepresentation will have occurred.

If a misrepresentation has occurred then it must be decided which one it has occurred under. All of these categories have remedies but they are all different. If the misrepresentation is fraudulent then recission and damages can be given under the tort of deceit, so they will get their money back and the contract will be void. Under negligent misrepresentation the remedies are the same but are also available under the misrepresentation act, damages can be applied under the Hedley Byrne principle in which the party will not get all their money back unless a foreseeable consequential loss has occurred. If innocent misrepresentation has taken place then there will be no remedies under neither common law or the Act as the person didn’t believe the statement to be false, however under statute law damages can be given in lieu of rescission as an equitable remedy.

Apply
When considering if a misrepresentation has been made we have to go through the 6 elements and see if all have occurred. Firstly a statement of material fact has been made with the statement about the house being in excellent condition which to some people may be seen as a mere opinion from Alex. Secondly the statement was not made by a 3rd party as it was made by Alex herself and nobody else leading to misrepresentation, all of the statements that were made by Alex were done so before the contract was made an not after so it is still in the running for misrepresentation. From some peoples point of views inducement was made. When Alex said that the neighbours were friendly this would have induced Rachael into the contract as nobody wants neighbours who are unfriendly and hostile, the fact that the house was in excellent condition would also have induced her into the contract as it would have meant that no repairs would have had to be made so she would not incur any extra expense to the amount she would have paid for the house. when Alex made the statement about the neighbours she most likely did not intend it to be legally binding and was most likely not put into the contract . In Rachel’s eyes a false statement was made when Alex said that the house was in an excellent condition. So as the statements fit all of the elements misrepresentation has occurred. However some may say that it was Rachel’s fault as she did not spot the repairs and Alex did not have to mention the repairs that needed to be made. Fraudulent misrepresentation can be said to have occurred because Alex did not mention the factory on the next street and if Rachel knew this she probably wouldn’t have brought the house. if this has occurred then Rachel will be entitled to have the contract rescinded and will be able to get all her money back that she had to spend getting the house repaired and the legal expenses.

Innocent misrep has not occurred because Alex knew of the repairs so could not have truthfully believed her statements.

Negligent misrep can possibly be argued because maybe Alex did have reasonable belief in her statements.

Conclusion
I would have to say that misrepresentation has definetly taken place and I would have to say that Negligent Misrepresentation has not taken place because I believe that Alex knew that all of her statements made were false and there was no special relationship.

I would argue that Alex is liable under Fraudulent Misrepresentation as in my opinion she made those statements knowing they were false so I would advise Rachel to claim under Fraudulent misrep, so she is able to get all her money back and get the contract rescinded back to the starting point.

Statement A * Contracts are divided into social/domestic and commercial agreements * The question for the courts would be if the father intended to create legal relations with his daughter or not * A business arrangement means the party is expecting some commercial gain * There was a business arrangement as Sarah expected payment. * The statement is accurate

Statement B * Contracts are divided into social/domestic and commercial agreements * Family agreements are presumed not to be intended to create legal relations * Uncertainty is created as the facts of the case determine if there was legal intent * If the agreement was mutual then it will be seen as legally binding * This statement is inaccurate because commercial gain was expected so it is a commercial agreement.

Statement C * Contracts are divided into social/domestic and commercial agreements * Family agreements are presumed not to be intended to create legal relations * This could be seen as a business arrangement as commercial gain was expected * Where parties are husband and wife the burden is on the wife to rebut the presumption that there was no intention to create a contract. * She would be able to sue if the marriage broke down * The statement is accurate

Statement D * Contracts are divided into social/domestic and commercial agreements * Family agreements are presumed not to be intended to create legal relations * The indication of a gift or bonus indicates a legal relationship was intended * If it is clear that the bonus was not a serious promise then it will not be seen as intended to be legally binding * This statement is inaccurate as a bonus is legal binding

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