Misrepresentation

Vitiating factors Impair the validity of a contract Render a contract void or voidable Vitiating factors = elements which impair the validity of a contract Render a contract void (it has no legal effect, a nullity) Voidable (one of the parties may avoid the contract / have the contract set aside) – until that point it remains valid Contract law is based on the “freedom of contract” – the idea that people are free to voluntarily enter into contracts. However, if someone enters into a contract because they are forced to, or on the basis of false information, then the freedom of contract has been undermined.

Misrepresentation A false assertion of material fact made through words or acts, which acts to induce the other party to sign the contract. In general there is no duty of disclosure Today look at one of those vitiating factors > misrepresentation > if representation is proved, it renders a contract voidable Induce = persuade Must induce them to sign the contract - if a defect was concealed but the buyer did not inspect the object this cannot be grounds for misrepresentation, In general there is no duty of disclosure :Silence – failure to disclose important information – will not usually constitute misrepresentation, but it can in some limited circumstances (e.g. in insurance contracts or relations between trustess and beneficiaries of a trust),

Opinion or fact? If D is an expert or professional, the court is more likely to consider that a statement was an assertion of fact

Sales talk” or “advertising puff” does not constitute misrepresentation Sales talk / puff Promotional speech >no reasonable person would take literally

Misrepresentation Misrepresentation under Section 2(1) of the Misrepresentation Act (1967) The defendant must show that he believed the statement to be true at the time it was made, and there were reasonable grounds for that belief There are different types of misrepresentation. The easiest to for a claimant to claim under is the MRA This puts the onus on the defendnat > its the def who has to prove something

Misrepresentation Fraudulent misrepresentation making a false statement, while knowing it to be true, or reckless about whether it was true Fraudulent: makes a false statement, knowing it to be true, or reckless about whether it was true Mis Act: The onus is on the defendant to show that he believed the statement to be true at the time it was made, and there were reasonable grounds for that belief Don’t firget that in tort, there is also Negligent misstatement > seen on correction Negligence, duty of care made by those with expert knowledge or skill, making statement to those with whom they have a “special relationship” such as a customer or client – must use reasonable care to ensure the accuracy of their representations

Misrepresentation Remedies Damages Rescission (to rescind): an equitable remedy allowing courts to set aside a voidable contract