OCR A2 Law - The Law of Contract - Misrepresentation (6)

3. Impossibility: Rescission means putting parties back in their pre-contractual position, if this isn't possible rescission won't be granted.

CASE: "Lagunas v Lagunas". In this case a nitrate field was bought on the strength of an IM about the market for nitrates. HELD: They failed in their action as they extracted the nitrates for some time and couldn't be restored to their pre-contractual position.

4. 3rd Party Rights: This is the main bar to rescission and typically arrives when goods have been bought via a bounching cheque.

CASE: "White v Garden". In this case a rogue of 50 tons of iron with a forged bill of exchange and sold it to a 3rd party who acted in good faith. HELD: The action failed as the 3rd party obtained good title to the goods.

(2) Damages: Damages (Financial compensation) are also available for a party who's been a victim of a misrep, but it depends on the type of misrep. This is available under the common law and statute.

1. Fraudulent Misrep (FM): This is available under the Common Law and the Tort of Deceit. Consequential damages can be given if the fraud can be proved. CASE: "Smith Securities v Scrimgeour". In this case damages were awarded according to the buying price of 82.25p rather than 78p. - Under Statute Law there is no right to consequential damages.