8 CONTRACT LAW 2: MISREPRESENTATION
Essay plans A
1. m. = false state. of fact by A relied on by B when ent. contract;
diff. kinds =
• f.m. • n.m. • w.i.m. • n.m. under stat.
2. remedies =
3. law = purchaser ... can sue for resc. or dam.
• f.m. = ??? • n.m. = rescission or damages
BUT
√ seller ... not have to reveal all facts
caveat emptor 4. my opinion !!!
Essay extracts 1
2. f.m.
• defences = ??? • remedies = ???
3. n.m.
• defences = ??? • remedy = damages (usu.)
B
1. f.m. = state. know = true
/ true, or don’t check if def. in Derry v Peek (1889)
n.m. = state. = can’t know if true or not 1st seen in Hedley Byrne v Heller [1964]
The first type of misrepresentation in law is fraudulent misrepresentation, which occurs when you make a statement knowing it to be untrue. It can also occur when you make a statement which you do not bother to check the truth of. This type of misrepresentation was defined in the case of Derry v Peek (1889). The second type of misrepresentation, negligent misrepresentation, happens when you can’t know whether a statement is true or not. This was first seen in the case of Hedley Byrne v Heller [1964]. Thirdly, there is wholly innocent misrepresentation, which, as the name implies, can happen when, quite innocently, one party makes a statement believing it to be true, although it later turns out to be false. Finally, there is negligent misrepresentation under statute, which can apply in the case of a contract entered into because of a false statement, even if that statement was not made fraudulently.
2
The case was extremely significant. The plaintiffs lost, because the court held that the disclaimer which they had written was sufficient to exempt them from a claim. However, the court also held that a special duty of care could exist between two parties, even if there was no contract. In this case, a negligent misstatement could lead to a civil claim.
Essay question
Waynesville College prepares students for university in the UK. The college states in its brochure: All students will be placed in suitable accommodation within an hour by public transport from the college. All classes are taught by fully qualified and highly experienced teachers. Student X shared a room with three other students. It generally took him an hour and a half to reach the college. His teacher had only just graduated from university. Student X failed to get into university and wants to sue Waynesville College. Advise Student X on the legal implications and possible outcomes of this case.
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