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In contract law, a misrepresentation is a false statement of fact made by one party to another party and has the effect of inducing that party into the contract. For example, under certain circumstances, false statements or promises made by a seller of goods regarding the quality or nature of the product that the seller has may constitute misrepresentation. A finding of misrepresentation allows for a remedy of rescission and sometimes damages depending on the type of misrepresentation. Image File history File links Scale_of_justice. ...
A contract is a promise or an agreement that is enforced or recognized by the law. ...
This article concerns the common-law legal system, as contrasted with the civil law legal system; for other meanings of the term, within the field of law, see common law (disambiguation). ...
Contract theory is the body of legal thought that investigates normative and conceptual problems in contract law. ...
Offer and acceptance analysis is a traditional approach in contract law used to determine whether an agreement exists between two parties. ...
The mailbox rule or the postal acceptance rule is a term of common law contracts which determines when a contract has been formed where the parties are communicating via the mail. ...
In the law of contracts, the mirror image rule states that an offer must be accepted exactly without modifications. ...
In contract law, an invitation to treat (invitation to bargain in the US) is an action by one party which may appear to be a contractual offer but which is actually inviting others to make an offer of their own. ...
It has been suggested that this article or section be merged with Consideration under English law. ...
The capacity of both natural and artificial persons determines whether they may make binding amendments to their rights, duties and obligations, such as getting married or merging, entering into contracts, making gifts, or writing a valid will. ...
Duress in the context of contract law is a common law defence, and if you are successful in proving that the contract is vitiated by duress, you can rescind the contract, since it is then voidable. ...
Undue influence (as a term in jurisprudence) is an equitable doctrine that involves one person taking advantage of a position of power over another person. ...
In contract law, an illusory promise is one that courts will not enforce. ...
The statute of frauds refers to a requirement in many common law jurisdictions that certain kinds of contracts, typically contractual obligations, be done in writing. ...
This article or section does not cite its references or sources. ...
This article or section does not cite its references or sources. ...
A standard form contract (sometimes referred to as a contract of adhesion or boilerplate contract) is a contract between two parties that does not allow for negotiation, i. ...
An integration clause, in the contract law, is a term in the language of the contract that declares it to be the complete and final agreement between the parties. ...
In contract law a mistake is incorrect understanding by one or more parties to a contract and may be used as grounds to invalidate the agreement. ...
Frustration of purpose is a term used in the law of contracts to describe a defense to an action for non-performance based on the occurance of an unforseen event which makes performance impossible or commercially impracticable. ...
Modal logic, or (less commonly) intensional logic is the branch of logic that deals with sentences that are qualified by modalities such as can, could, might, may, must, possibly, and necessarily, and others. ...
This article or section does not cite its references or sources. ...
This article or section does not cite its references or sources. ...
An illegal agreement, under the common law of contract, is one that the courts will not enforce because the purpose of the agreement is to achieve an illegal end. ...
Accord and satisfaction is the purchase of the release from a debt obligation. ...
An assignment is a term used with similar meanings in the law of contracts and in the law of real estate. ...
Delegation is a term used in the law of contracts to describe the act of giving another person the responsibility of carrying out the performance agreed to in a contract. ...
Novation is a term used in contract law and business law to describe the act of either replacing an obligation to perform with a new obligation, or replacing a party to an agreement with a new party. ...
A third party beneficiary, in the law of contracts, is a person who may have the right to sue on a contract, despite not having originally been a party to the contract. ...
Breach of contract is a legal concept in which a binding agreement or bargained-for exchange is not honored by one of the parties to the contract by non-performance or interference with the other partys performance. ...
Anticipatory repudiation (or anticipatory breach) is a term in the law of contracts that describes a declaration by one party (the promissing party) to a contract that they do not intend to live up to their obligations under the contract. ...
Cover is a term used in the law of contracts to describe a remedy available to a merchant buyer who has received an anticipatory repudiation of a contract for the receipt of goods. ...
An exclusion clause is a term in a contract that seeks to restrict the rights of the parties to the contract. ...
Fundamental breach, sometimes known as a repudiatory breach, is a breach so fundamental that it permits the aggrieved party to terminate performance of the contract, in addition to entitling that party to sue for damages. ...
In the law of remedies, a specific performance is a demand of a party to perform a specific act. ...
Liquidated damages is a term use in the law of contracts to describe a contractual term which establishes damages to be paid to one party if the other party should breach the contract. ...
Penal damages are best seen as quantitatively excessive liquidated damages and are invalid under the common law. ...
In contract law, rescission (to rescind or set aside a contract) refers to the cancellation of the contract between the parties. ...
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Commercial law or business law is the body of law which governs business and commerce and is often considered to be a branch of civil law and deals both with issues of private law and public law. ...
In the common law, a tort is a civil wrong for which the law provides a remedy. ...
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The law of evidence governs the use of testimony (e. ...
A contract is any promise or set of promises made by one party to another for the breach of which the law provides a remedy. ...
In contract law, rescission (to rescind or set aside a contract) refers to the cancellation of the contract between the parties. ...
In law, damages refers either to the harm suffered by a claimant in a civil action, or to the money paid or awarded to the plaintiff in compensation for such harm. ...
According to Gordon v Selico (1986) 18 HLR 219 it is possible to make a misrepresentation either by words or by conduct, although not everything said or done is capable of constituting a misrepresentation. Generally, statements of opinion or intention are not statements of fact in the context of misrepresentation [1]. It should be noted though that if one party claims specialist knowledge on the topic discussed, then it is more likely for the courts to hold a statement of opinion by that party as a statement of fact [2].
Representation is not a term To seek a remedy under misrepresentation it must first be determined that the representation is not a term of the contract (i.e. a warranty or condition). This is determined objectively by the trier of fact by looking at the time that the representation was made: the closer to the moment of contract formation, the more likely it is a term. If there is any mention of the representation in writing, then it could be construed as part of the contract. A trier of fact is the person or group of persons in a trial who make findings of fact as opposed to rulings of law. ...
As well, the Courts will often attempt to find a collateral contract by interpreting the representation as a promise accompanied by some sort of consideration (see Heilbut, Symons & Co. v. Buckleton [1913] A.C. 30 (H.L.)). The collateral contract will have the effect of adding the representation as a term to the contract. A collateral contract is a contract where the consideration is the entry into another contract, and co-exists side by side with the main contract. ...
If the representation is found to be a term then the normal remedies for breach of contract apply. Breach of contract is a legal concept in which a binding agreement or bargained-for exchange is not honored by one of the parties to the contract by non-performance or interference with the other partys performance. ...
Types of misrepresentation There are three types of misrepresentation. Depending on the type, the remedies available vary: - Fraudulent misrepresentation ( Derry v Peek )is when the representation is made with intent to deceive and with the knowledge that it is false. This is generally a difficult type of misrepresentation to prove but allows for a remedy of both damages and rescission. An action for fraudulent misrepresentation can also be brought as a tort. Fraudulent misrepresentation is capable of being made recklessly [3].
- Negligent misrepresentation is when the representation is made carelessly while having no reasonable reasons for believing it to be true. This class of misrepresentation is relatively new and was introduced in order to allow for a remedy of damages in situations where neither a collateral contract nor fraud could be found. It was first seen in the case of Hedley Byrne v. Heller [1964] A.C. 465 where the court found that a statement made negligently that was relied upon can be actionable in tort. Lord Denning in Esso Petroleum Co. Ltd. v. Mardon [1976] Q.B. 108 however, transported the tort into contract law, stating the rule as:
- if a man, who has or professes to have special knowledge or skill, makes a representation by virtue thereof to another…with the intention of inducing him to enter into a contract with him, he is under a duty to use reasonable care to see that the representation is correct, and that the advice, information or opinion is reliable
- Innocent misrepresentation is when the representor had reasonable grounds for believing that his or her false statement was true. This type of representation only allows for a remedy of rescission.
In the common law, a tort is a civil wrong, other than a breach of contract, for which the law provides a remedy. ...
Hedley Byrne v. ...
Alfred Thompson Denning, Baron Denning (23 January 1899–6 March 1999) was a British barrister from Hampshire who became Master of the Rolls (the senior civil judge in the Court of Appeal of England and Wales) and was generally well liked, both within the legal profession and outside it. ...
Remedies
Rescission Generally, the effect of misrepresentation is that it makes the contract voidable (the representee can chose whether to affirm the contract or have it rescinded). Rescission can be done either by informing the representor or by requesting an order from the court. There are certain circumstances where rescission is not possible though. The idea behind rescission is that the parties are restored to the positions they were before entering into the contract. Therefore, if this is not possible, rescission is not an option [4].
If the representee discovers the misrepresentation and fails to take steps to avoid the contract, then he may not be able to rescind it [5]. The time limit for taking such steps varies depending on the type of misrepresentation. In cases of fraudulent misrepresentation, the time limit runs until when the misrepresentation ought to have been discovered, whereas in innocent misrepresentation, the right to rescission may lapse even before the representee can reasonable be expected to know about it [6].
In certain circumstances, third party rights may interfere with rescission and render it impossible. For example, if B contracts with A to sell a house with a misrepresentation and then A sells the house to C, the courts are not likely to permit rescission as that would require C to give up the house.
In England and Wales, under s. 2(2) of the Misrepresentation Act 1967, the court has the discretion so award damages instead of rescission.
Damages In cases of fraudulent misrepresentation, a claim for damages is under the tort of deceit, making the damages tortuous, in other words, only actual losses are recoverable. If the losses are calculated under th Misrepresentation Act 1967, damages for misrepresentation are calculated as if the defendent had been fraudulent, even if he has been only negligent. This is a wider scope than ussualy tortious liability, as it protects the claimant's loss even if it was not reasonably foreseeable. inclusion of the representation into the contract as a condition will leave the remedy for breach in damages as a common law right. The difference is that damages for misrepresentation usually reflect C's reliance interest, whereas damages for breach of contract protect C's expectation interest, although the rules on mitigation will apply in this case. In certain cases though, the courts have awarded damages for loss of profit, basing it on loss of opportunity [7]. In cases of negligent misrepresentation, a claim for damages may be made either in the tort of negligence or under s. 2(1) of the Misrepresentation Act 1967 (England and Wales). This article is about the telling of falsehoods. ...
In law, negligence is a type of tort or delict that can be either criminal or civil in nature. ...
In cases of innocent misrepresentation, the court has a discretion to award damages instead of rescission. Such damages are intended to accomplish the same thing as rescission: restoration of the parties to their original positions, rather then compensate any losses. The result of this is that damages for any losses other than what was agreed to be transferred are not recoverable.
See also False pretenses is a common law crime. ...
Authorities - ^ See Bisset v Wilkinson and others [1927] AC 177.
- ^ See Esso Petroleum Co Ltd v Mardon [1976] 2 Lloyd's Rep. 305.
- ^ See Derry v Peek (1889) 14 App. Cas. 337.
- ^ See Erlanger v New Sombrero Phosphate Co (1878) 3 App. Cas. 308.
- ^ See Long v Lloyd [1958] 1 WLR 753
- ^ See Leaf v International Galleries [1950] 2 KB 86.
- ^ See East v Maurer [1991] 2 All ER 733.
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