Question TMA 2
The case study preferred to Shahida, a
fashion designer, who is in dispute with a local art gallery, Benjamin’s
Looking Glass. The dispute is about Shahida taking legal action against the art
gallery for selling her a wrong piece of painting, due to misrepresentation
from the sales assistant. The case study has shed light on the nature of
misrepresentation on a contract in order
to determine the possible legal actions and what remedy that may be available
Misrepresentation is relating to many
aspects in English law, both in contract and tort with a view to give an
adequate judgement. Misrepresentation is a not a term of contract but a false
statement of fact that induces the representee to enter into the contract and
it must have been relied on. The types of actionable misrepresentation is
determine by the state of mind of the
representor if it was made innocently, negligently or fraudulently. However the fallout of misrepresentation on a
contract is less serious compare with a mistake, one is voidable and the other
is not void.
In most circumstances, the court will
able to point out the existence of misrepresentation on basis of conduct made
by representor hence the contract could be rescinded. In Curtis v Chemical
Cleaning 1951 1 KB 805, Lord Denning stated ‘any behaviour, by words or
conduct, is sufficient to be a misrepresentation if it is such as to mislead
the other…if it conveys a false impression, that is enough’.
There are three elements in the
expression of representation. To begin with, there must be a statement, the
statement of specific existing and
verifiable fact or past event and the statement must induce the contract. Silence
or non-disclosure has no effect if it does not relevant to the conditions of
the contract or being unknown to the third party . For instance, in Fletcher v
Krell 1873 42 LJ QB 55. The person who applied for the job of governess did
not need to disclose the fact that she had previously been married thus
remained silent. An actionable misrepresentation must be a false statement of
fact, not an opinion, future intention or law.
False statement of opinion is not a
misrepresentation of fact. In Bisset v Wilkson 1927 AC 177 Privy Council, the
claimant asked defendant for a statement of opinion even though defendant has
no sufficient knowledge to give an accurate answer. So therefore the council
held it was not an actionable misrepresentation.
A false statement by a person as what
will happen in the future is not classify as a misrepresentation and will not
be legally valid unless the statement is included into the contract. Then the
statement will be considered as a promise if it has induced another to enter
into a contract. Edgington v Fitzmaurice 1885 29 Ch D 459, held it was an
actionable misrepresentation as the defendant was in the position to carry out
his statement of promise for the future.
A false statement as to the law will be
not considered as actionable misrepresentation. Base on the fact that everyone
is presumed to know the law. Solle v Butcher 1950 1 KB 671.
Once misrepresentation has been
entrenched it is necessary to consider what types of actionable
misrepresentation has been made. The importance of the distinction depend on
the remedies available.
Fraudulent misrepresentation was
defined by Lord Herschell in Derry v Peek 1889 5 T.L.R. 625 ‘as a statement
which is made either knowing it to be false, without belief in it truth or recklessly,
careless as to whether it be true or false’. Therefore, if the defendant made a
statement which they honestly believe is true then it cannot be a fraudulent.
In Derry v Peek, the statement was made in the honest belief that approval to
use steam powered trams was forthcoming. So therefore the burden of proof is on
Negligent misrepresentation is a false statement made by a person who had no reasonable ground to believing
their statement to be true. The House of Lords have held that in certain
circumstances damages may be recoverable in tort for negligent misstatement
causing financial loss.