Types of Misrepresentation Flashcards
What are the four key types of misrepresentation?
(1) Fraudulent
(2) Negligent at Common Law
(3) Negligent under Statute
(4) Innocent
What is a fraudulent misrepresentation? (1)
A false statement made with an absence of the honest belief that the statement was true.
Authority - Derry v Peek
What is the concept of fraudulent misrepresentation based upon?
It is rooted in the tort of deceit.
What are the three ways in which a fraudulent misrepresentation can be made out?
A statement made;
(1) Knowing it is false
(2) Not believing it is true
(3) Recklessly, not caring if it’s true or not
What is irrelevant when considering a potential fraudulent misrepresentation? (1)
While dishonesty is required the motive for that dishonestly is irrelevant.
Authority - Foster v Charles
Where does the onus or burden of proof lie in regards to fraudulent misrepresentations? (1)
The onus lies with the claimant to demonstrate that the misrepresentation made to them was in fact fraudulent.
Authority - Derry v Peak
What is negligent misrepresentation (at common law or under statute)?
A false statement made with an honest belief that the statement is in fact true, but underpinned by a failure to fulfil their duty to use reasonable care and skill to check the accuracy of their statement.
In what case was the test for a duty of care (in regards to negligent misrepresentation at common law) laid out? (1)
Byrne v Heller
What criteria were laid out for a duty of care in regards to negligent misrepresentation at common law?
(1) Reasonable foreseeability of reliance and harm
(2) Sufficient proximity between the parties
(3) Just and reasonable that a duty be imposed
What was further acknowledged about the required relationship between the parties for negligent misrepresentation? (1)
There is no need for the representer to be in a professional capacity, duty may arise merely from superior knowledge of one party relied upon by the other.
Authority - Byrne v Heller
On what grounds can claimants recover in cases of negligent misrepresentation? (1)
It appears possible for parties to recover in both Tort and Contract in cases of negligent misrepresentation.
Authority - Midland Bank Trust Co Ltd v Het, Stubbs and Kemp
What provides the basis for negligent misrepresentation under statute?
Section 2(1) of the Misrepresentation Act 1967.
What is the threshold or level provided for under s 2(1) of the MA 1967? (1)
Under this legislation the maker of a given statement must positively establish that they had reasonable grounds for believing in the truth of the statement in order to avoid negligence.
Authority - Howard Marine & Dredging Co Ltd v A Ogden & Sons Ltd
How does the burden of proof differ in case of common law and statutory negligence?
Under Common Law misrepresentation the burden of proof lies with the claimant to establish the negligence of the defendant in making a statement, this is reversed under statute where the defendant must positively demonstrate that they were not in fact negligent.
What are the advantages of statutory negligence claims over common law ones?
(1) There is no need to establish a duty of care
(2) The representor cannot escape liability merely by disproving negligence, but rather must affirmatively prove reasonable grounds for their belief.
