Essay type Research. Rather, it contains Read more. This is very different to the circumstances in Bisset v. This act of Jeannie constitutes pre — contractual misrepresentation, as misrepresentation essay been established in With v. Traditional media incorporates multiple communication approaches that have been in use for over a long period, misrepresentation essay.
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A misrepresentation may be fraudulent, negligent misstatement, or wholly innocent. The applicable remedy depends on misrepresentation essay nature of the misrepresentation, misrepresentation essay. In order for a representation to amount to an actionable misrepresentation it must be: a false; b one of fact as oppose to intention, opinion, or law; c The statement must be addressed to the party who claims to have been misled; it must be the chief reason which induced the other party to enter the contract. If the representation that is being challenged satisfies these four requirements, misrepresentation essay, then it is an actionable representation.
Statement of Fact or Opinion A statement which is made to the other party that is false and induces him to enter into the contract, this is an actionable misrepresentation. The false statement must be one of fact and not of law because no one can misrepresent the law since everyone is presumed to know the law. A statement of opinion is not actionable per misrepresentation essay as a misrepresentation because it is not a statement of fact. In Bisset v. Wilkinson, the respondent purchased from the appellant, two plots of land in New Zealand for the purpose of sheep farming. During the negotiations, the appellant told the respondent that, if the place misrepresentation essay worked properly, it would carry two thousand sheep. The respondent, it was admitted, bought the place believing that it would carry two thousand sheep.
As both parties were aware, the appellant had not and, so far as appeared, no other person had at anytime carried on sheep farming on the land. In an action for rescission for misrepresentation, Sim J. said: In ordinary circumstances, any statement made by any owner who has been occupying his own farm, as to its carrying capacity would be regarded as a statement of fact…, misrepresentation essay. This, however, is not such a case … in these circumstances. The plaintiff were not justified in regarding anything said by the defendant as to the carrying capacity as being anything more than an expression of opinion on the subject.
Order custom essay Misrepresentation in Law with free plagiarism report. Their Lordships concurred in their view on the matter, and therefore held misrepresentation essay the purchaser had no right to rescind the contract since an erroneous opinion stated by the party affirming the contract, though it has been relied upon and has induced the contract on the part of the party who seeks rescission, misrepresentation essay, gives no title to relief unless fraud is established. The ratio decindendi of this decision is that the respondent had no previous or present misrepresentation essay of the capacity of the land, misrepresentation essay, neither was he an expert in sheep farming??
So in the opinion of the Court the most he could have averred was a mere opinion. However, in certain circumstances, an opinion because it presupposes the possession of certain knowledge, may be an actionable misrepresentation. In Misrepresentation essay v Land and House Property Corporation, the vendor of an hotelier described it as let to a Mr. Frederick Fleck, a most desirable tenant. The tenant was in fact in arrears with his rent. It was held that the statement was not a mere expression of opinion because the vendor was impliedly stating that he has facts, which misrepresentation essay his opinion. Mardon did all that could be expected of him as tenant but the site was not misrepresentation essay enough to achieve a through-put of more than 10, gallons.
In July Mardon gave notice to quit, but Esso granted him a new tenancy at a reduced rent, misrepresentation essay. Mardon continued to lose money and by August was unable to pay for petrol supplied. Esso claimed possession of the site and the money due. Mardon claimed damages in respect of the representation alleging that it amounted to 1 a warranty, 2 a negligent misrepresentation. On the matter Lord Denning M, misrepresentation essay. said that Council for Esso retaliated by citing Bisset v. He submitted that the forecast here ofmisrepresentation essay, gallons was an expression of opinion and not a statement of fact, and that it could not be interpreted as a warranty or promise.
Lord Denning said that he would quite agree with Counsel for Esso that it was not a warranty — in this sense that it did not guarantee that misrepresentation essay through-put would begallons. But one party, Esso, has special knowledge and skill. It was the yardstick by which they measure the worth of a filling station. They knew the facts. They knew the traffic in the town, they knew the through-put of comparable stations, misrepresentation essay. They had much experience and expertise at their disposal, misrepresentation essay. His Lordship went on to show that Esso was in a much better position than Mr. Mardon and their statement of opinion presupposes that they have knowledge to support the opinion.
This is very different to the circumstances in Bisset v. Wilkinson where the land had never been used as a sheep farm and both parties were equally able to form an opinion as to its carrying capacity. The Court, therefore, found that Esso was liable for damages for breach of warranty. Fact and Intention Where a representation merely expresses the intention of one party, under normal circumstances the intention, if it is not fulfilled, is not an actionable representation. However, in some circumstances an expression of intention may be considered a statement of fact. In Edgington v, misrepresentation essay. Their statement of intention was held to be a statement of fact. Can Silence Amount to Misrepresentation? Generally silence is not misrepresentation. Each man must protect his own interest and exercise reasonable caution when entering a contract: Caveat emptor.
However, the court may consider certain kinds of silence as misrepresentation. The negotiations began January 1 at which time the practice was worth? However, the defendant fell ill and by May 1 when the contract of sale was signed, the practice was virtually worthless, misrepresentation essay. Opportunity to Verify Representation Where the representee is given the opportunity to verify the representation made to misrepresentation essay, he may or may not make use of the opportunity. If he chooses to act on the statements made by the representor and the statements turn out to be false he can sue but misrepresentation essay he chooses to verify and confirm a statement, which is in fact false, he cannot sue the representor.
In Redgrave v, misrepresentation essay. He was given the opportunity to inspect the books, but he did not. If he had checked the books, he would have found that the practice was over-valued. However, misrepresentation essay, the Court held that the non-use of this opportunity did not vitiate his claim. The Privy Council in Senanayake v. Chenq followed this decision. However, when the representee carries out independent investigation to ascertain the accuracy of any statement made to him, though he did not find out the truth, he cannot claim to have been misled because then he would be relying on his own findings or that of his experts.
In Atwood v. Misrepresentation essay, a vendor offered to sell a mine and made exaggerated claims as to its capacity. The buyer appointed agents to investigate the mines. The agents reported wrongly that the claims were true. The contract of sale was then completed. Curtis v. Chemical Cleaners misrepresentation, misrepresentation essay. Types of Misrepresentation essay. Fraudulent Misrepresentation. Fraud was defined by Lord Herschel in Derry v. Peek as meaning that the representation made is a false representation: 1 Knowingly or 2 Without belief in its truth or 3 Recklessly, careless whether it is true or false.
Fraud must be strictly proven and the burden of proof is high: It requires evidence of actual dishonesty. Section 2 1 of the Misrepresentation Ac,codified this principle. The defendant can escape liability on the section if he can show that he had reasonable grounds for the belief and that he held those beliefs up to the time the contract was made that the facts represented were true. The burden of proof is on the representor. See the judgment of Lord Denning in Esso Petroleum v, misrepresentation essay. Seeing that the S, misrepresentation essay. Where a representation becomes a term of the contract, the plaintiff will sue for breach of a contractual term or breach of warranty, not for misrepresentation. Innocent Misrepresentation, misrepresentation essay.
Whittington v. Seale-Hayne Types of Remedies An actionable misrepresentation attracts the remedies of rescission and damages, misrepresentation essay. Rescission, providing that none of misrepresentation essay bars to rescission are applicable, cancels the contract and restores the parties to the status quo ante. When rescission fails the innocent party will be awarded damages which is a monetary compensation that will put him in the position he would have been in but for the misrepresentation of the representor with whom the innocent party had contracted. Rescission or Cancellation. The right to rescind is the right of a party to have the contract misrepresentation essay aside and to be restored to his former position, misrepresentation essay.
The contract remains valid unless and until rescinded. Third parties may acquire interest under the contract if the innocent party does not act with promptitude, providing that the innocent party is a bona misrepresentation essay honest purchaser for valuable consideration. The cheque was dishonoured when the defendant presented it the following day. He immediately informed the police and the Automobile Association of the fraudulent transaction. Norris subsequently sold the car to a third party who sold it to the plaintiff. Lord Denning M. held that where a seller of goods had a right to avoid a contract for fraud, he sufficiently exercised his election if, on discovering the fraud, he immediately took all possible steps to regain the goods, even though he could not find the purchaser or communicate with him, misrepresentation essay, and the contract was rescinded on January If the innocent party delayed cancelling the contract, any third party who purchased the item bona fide would have acquired a good title to the property and the original owner had no claim to it.
See the speech of Lord Wilberforce in Johnson v. There are several bars to the right to rescind which may work against the innocent party to the contract. The bars are restitution impossible, third-party rights, misrepresentation essay, affirmation, lapse of time.
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This statement had been correct at the time of its issuance. Subsequently, the vendor became sick and income from the practice declined. Consequently, the value of the practice was much lower at the time of the sale than the amount of price paid by the buyer of the practice. The court held that the medical practitioner had failed to correct his earlier statement made to the purchaser and found that a misrepresentation had occurred in the sale contract. Under the provisions of the law, an untrue statement of fact made at the time of negotiating a contract that induces other party to enter into the contract, is a misrepresentation.
There are several remedies available for the injured party, and they depend on whether the misrepresentation was fraudulent, negligent, or innocent. Silence cannot be construed as misrepresentation. Similarly, statements of opinion cannot be treated as facts. In Derry v Peek , the company prospectus had contained misleading and incorrect information. The prospectus had stated that the company had been approved by the Parliament for running trams in the city. However, this was not true; and in order to claim and obtain compensation for damages, the injured party had to prove fraudulent, tortuous or deceitful conduct of the other party. The court held that the plaintiff had failed to prove the fraudulent behaviour of the defendants and dismissed the case.
Innocent misrepresentation transpires if the party can prove that the misrepresentations were made out of innocence, without any fraudulent intention and if they were not negligent at common law; in accordance with section 2 1 of the Misrepresentation Act , otherwise they will not be deemed to be innocent misrepresentations. The only remedy available in common law for a misrepresentation that was made in good faith and after taking all reasonable care, is rescission. Remedies available for misrepresentations include damages for fraudulent or negligent misrepresentations; rescission for fraudulent or negligent misrepresentations that were made innocently; and damages in lieu of rescission.
The Misrepresentation Act provides several legal consequences for misrepresentations. In the case of innocent misrepresentation, the remedy available is that the innocent party can rescind the contract wholly. English law sets out that there should not be any tortuous and equitable duties that are aimed at deceit or misrepresenting the facts. Moreover, English law does not recognise the general duty of good faith. In contract negotiations, silence cannot be treated as representation, and can only be considered as half truth of a misrepresentation. The Misrepresentation Act requires the courts to consider the possibility of awarding damages instead of rescission of the contract, in cases where rescission is sought by the parties.
The Act provides a right to the innocent party to recover damages from the other party who had made a misrepresentation. However, under those circumstances the injured party is required to prove that he had believed the representation, on grounds that were reasonable. The party has also to prove that he had believed the facts to be true till the time that he had entered into the contract. In case of fraudulent misrepresentation, the injured party can rescind the contract and claim damages in tort for deceit. There is a vast difference between tort in misrepresentation and in a breach of contract.
Similarly, the damage recoverable will also differ. The assessment of damages also varies in these two instances. In a misrepresentation, the damages are assessed in accordance with the legitimate expectation of the innocent party. In some cases, the party may incur loss by relying on a statement of another party even though there is no contract between them. In those cases, misrepresentation can be applied. In professional relationships; if misrepresentation is made negligently then it is possible to recover the damages caused by breach of duty of care , by the injured party. For instance, a surveyor may advise the party duly misrepresenting the cost or value of certain property. In such cases the injured party can claim damages from the party who had made the negligent misrepresentation.
The principle of duty of care applies in these cases and the courts examine whether the statement was made with a fraudulent motive and accordingly award damages to the injured party. In such cases, the provisions of other laws do not attempt to limit the damages. It is also unnecessary for a contract to exist between the parties. Since, Harry had suffered losses due to the misrepresentations made by Jeannie; he can rescind the contract and can claim damages for rescission, in accordance with the foregoing discussion. This essay was written by a fellow student. His Lordship went on to show that Esso was in a much better position than Mr. Mardon and their statement of opinion presupposes that they have knowledge to support the opinion. This is very different to the circumstances in Bisset v.
Wilkinson where the land had never been used as a sheep farm and both parties were equally able to form an opinion as to its carrying capacity. The Court, therefore, found that Esso was liable for damages for breach of warranty. Fact and Intention Where a representation merely expresses the intention of one party, under normal circumstances the intention, if it is not fulfilled, is not an actionable representation. However, in some circumstances an expression of intention may be considered a statement of fact. In Edgington v. Their statement of intention was held to be a statement of fact. Can Silence Amount to Misrepresentation? Generally silence is not misrepresentation.
Each man must protect his own interest and exercise reasonable caution when entering a contract: Caveat emptor. However, the court may consider certain kinds of silence as misrepresentation. The negotiations began January 1 at which time the practice was worth? However, the defendant fell ill and by May 1 when the contract of sale was signed, the practice was virtually worthless. Opportunity to Verify Representation Where the representee is given the opportunity to verify the representation made to him, he may or may not make use of the opportunity. If he chooses to act on the statements made by the representor and the statements turn out to be false he can sue but if he chooses to verify and confirm a statement, which is in fact false, he cannot sue the representor.
In Redgrave v. He was given the opportunity to inspect the books, but he did not. If he had checked the books, he would have found that the practice was over-valued. However, the Court held that the non-use of this opportunity did not vitiate his claim. The Privy Council in Senanayake v. Chenq followed this decision. However, when the representee carries out independent investigation to ascertain the accuracy of any statement made to him, though he did not find out the truth, he cannot claim to have been misled because then he would be relying on his own findings or that of his experts.
In Atwood v. Small, a vendor offered to sell a mine and made exaggerated claims as to its capacity. The buyer appointed agents to investigate the mines. The agents reported wrongly that the claims were true. The contract of sale was then completed. Curtis v. Chemical Cleaners misrepresentation. Types of Misrepresentation. Fraudulent Misrepresentation. Fraud was defined by Lord Herschel in Derry v. Peek as meaning that the representation made is a false representation: 1 Knowingly or 2 Without belief in its truth or 3 Recklessly, careless whether it is true or false. Fraud must be strictly proven and the burden of proof is high: It requires evidence of actual dishonesty. Section 2 1 of the Misrepresentation Ac, , codified this principle.
The defendant can escape liability on the section if he can show that he had reasonable grounds for the belief and that he held those beliefs up to the time the contract was made that the facts represented were true. The burden of proof is on the representor. See the judgment of Lord Denning in Esso Petroleum v. Seeing that the S. Where a representation becomes a term of the contract, the plaintiff will sue for breach of a contractual term or breach of warranty, not for misrepresentation. Innocent Misrepresentation. Whittington v. Seale-Hayne Types of Remedies An actionable misrepresentation attracts the remedies of rescission and damages.
Rescission, providing that none of the bars to rescission are applicable, cancels the contract and restores the parties to the status quo ante. When rescission fails the innocent party will be awarded damages which is a monetary compensation that will put him in the position he would have been in but for the misrepresentation of the representor with whom the innocent party had contracted. Rescission or Cancellation. The right to rescind is the right of a party to have the contract set aside and to be restored to his former position. The contract remains valid unless and until rescinded. Third parties may acquire interest under the contract if the innocent party does not act with promptitude, providing that the innocent party is a bona fide honest purchaser for valuable consideration.
The cheque was dishonoured when the defendant presented it the following day. He immediately informed the police and the Automobile Association of the fraudulent transaction. Norris subsequently sold the car to a third party who sold it to the plaintiff. Lord Denning M. held that where a seller of goods had a right to avoid a contract for fraud, he sufficiently exercised his election if, on discovering the fraud, he immediately took all possible steps to regain the goods, even though he could not find the purchaser or communicate with him, and the contract was rescinded on January If the innocent party delayed cancelling the contract, any third party who purchased the item bona fide would have acquired a good title to the property and the original owner had no claim to it.
See the speech of Lord Wilberforce in Johnson v. There are several bars to the right to rescind which may work against the innocent party to the contract. The bars are restitution impossible, third-party rights, affirmation, lapse of time. These are discussed in the paragraphs that follow. Restitution Impossible. When a party rescinds a contract, it must be possible for the Court to restore the two parties to the Status quo ante, to put the parties back in their original position before the contract was made. However, this limitation should not be strictly construed, and the mere fact that the subject matter of the contract may have deteriorated before the truth is discovered, is not sufficient to prevent restoration and so destroy the right to rescind a contract.
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