OCR A2 Law - The Law of Contract - Misrepresentation (1)

  • Created by: Majid
  • Created on: 08-05-13 19:36

Misrepresentation (1)

Intro: Misrepresentation is a vitiating factor, it invalidates an otherwise perfectly formed contract. They make a contract voidable. Misrepresentation is a false statement of fact, which is made before or at the time of the contract, and induces the other party into the contract.

1. False Statement: Is a statement that is oral, written or through conduct.

CASE: "Spice Girls v Aprilia". In this case the Spice Girls promoted themselves as a 5-piece band to use adverts for Aprilia, even though one member was about to leave. HELD: Misrep and the Spice Girls were sued successfully.

The general rule is that there is 'NO LIABILITY FOR SILENCE', unless it is a contract of 'good faith'. With such cases there's a duty to disclose all the information, which might affect the decision to enter a contract or the price of that contract. Best example is a Contract of Insurance/Mortgages/Contracts in a position of Trust.

CASE: "London Assurance v Mansel". In this case there was a contract of insurance but there was a failure to disclose that Mansel already been declined insurance before. HELD: ... MISREP.

There is also a duty to disclose a change in/of circumstance:

CASE: "With V O'Flanagan". In this case the doctor failed to disclose his income due to an illness. HELD: ... MISREP as he didn't tell the buyer what had happened.

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