A legally binding contract or agreement is usually formed of written and / or verbal terms setting out, more or less precisely, what the parties to the contract intend to do. During the process of reaching an agreement the parties may also make representations of fact. For example, a retailer selling a sit-on lawnmower may tell an interested customer that he will be “the fastest gardener in the West and the envy of all his neighbours” if he purchases the GrassNemesis 5000.
Representations and Terms
The contractual status of such a statement may depend on the intention of the person who makes it. If the person making the statement intends it to be contractually binding it will be a term of the contract. If he does not intend it to be binding it may be a representation. It can sometimes be difficult to determine whether a statement is a term of the contract or a representation – a trial examining the words and actions of the parties may be required.
A statement of opinion is unlikely to constitute a representation. Further, a statement which forms part of the advertising patter of a salesman may be classed as “mere puff” and not a representation. (The gardener, who bought the GrassNemesis 5000 because of the salesman’s statement above, may have trouble convincing a court that he is entitled to damages simply because several of his neighbours think he looks like an idiot on his new lawnmower.)
Representations and Misrepresentations
If a representation is untrue it is described as a misrepresentation and it may entitle the other party to end the contract. For a misrepresentation to result in this entitlement it must generally be shown that the misrepresentation induced the person to enter into the contract.
Different Types of Misrepresentations
Misrepresentations may be:
- Innocent – where the party who made it did not realise it was untrue;
- Fraudulent – where the party who made it knew that it was untrue or was careless as to whether or not it was true;
- Negligent – where the party who made it has a duty towards the other party arising out of a special relationship and, therefore, is expected to take additional care where it is foreseeable that the other party will rely on the statement.
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A misrepresentation may be made with the intention that it will induce the other party to enter into a contract. If it does induce the other party to enter into the contract it may then be an “actionable misrepresentation”. The party who was induced by the misrepresentation may then be entitled to a legal remedy.
Remedies for Misrepresentation
A misrepresentation may entitle the person who was thereby induced to enter the contract to set aside – or rescind - the contract. Alternatively a misrepresentation by one party may mean that the other party is entitled to damages.
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The Case of Hedley Byrne v Heller and the Misrepresentation Act 1967
Historically, a person was only entitled to legal remedies due to fraudulent misrepresentations. Subsequently, in the 1963 case of Hedley Byrne Co. Ltd v Heller, it was decided that there could be circumstances in which damages could follow negligent misrepresentations. This would generally be where a ‘special relationship’ exists between the parties - probably due to some particular skill or duty on the part of the person making the representation.
The Misrepresentation Act 1967 may give an entitlement to damages for a negligent misrepresentation unless the person who made it can prove that he believed that the representation was true and that he had reasonable grounds for this belief.
Misrepresentation and Rescission of a Contract
The purpose of the remedy of rescission is to put the person back into their pre-contract position. Generally, a person is not entitled to both rescind the contract and to claim damages. However, they may be entitled to monetary recompense if they incurred other obligations whilst bound by the contract.
A person may lose the right to rescind the contract if they discovered the misrepresentation and then expressly continued with – or affirmed - the contract. Rescission may also not be available if it has subsequently become impossible to return the parties to the position they were in before the contract.
Damages for Misrepresentation
The type of damages available to a person who has entered into a contract because of a misrepresentation may depend on both the type of misrepresentation and the effect of that misrepresentation. The purpose of the damages will generally be to compensate the innocent party for loss suffered in relying on the misrepresentation. However, the test applied by the courts may vary depending on whether a misrepresentation was fraudulent, negligent or innocent – and whether the claim is brought pursuant to the Misrepresentation Act.
leaflets at the candidate when we found out our election leaflets were not delivered unfair advantage was given to the winning candidate which has denied nearly 100,000
voters to vote for me
Can anyone help? As a retirement present for ourselves we decided to buy a boat. After searching on the internet we found the perfect boat being sold by a very reputable broker in Spain, but registered office UK. We had many exchanges over the next few weeks with the broker confirming the boat had been serviced in 2019 was in great condition. We were also sent a video of the boat both inside and out and asked the broker to confirm this was a true and honest reflection of the boat as he can see it now, which he confirmed. On the basis of this, an advert saying the boat had 10 years service history and having seen loads of receipts of a lot of money over the years being spent on the boat, we booked flights and a survey both engine and main survey at a cost of over £2000. We also paid over the deposit for the boat to the broker's UK bank account. On arrival in Spain, our surveyor was already there and informed us that the boat was both in a dirty state (nothing like the video) and it had almost certainly not been serviced for at least three years. To put the boat right would cost a lot of money and the seller's were not prepared to reduce the price. We have now got our deposit back but feel very angry that we were misled by both the advert and the all the broker communication. We would never have gone to Spain, paid for a survey had we known the boat had not been serviced for three years, had a hole in the upholstery which the broker never mentioned and the video failed to show. I feel the broker has misrepresented this boat and only we have been left out of pocket but we are afraid to take it to small claims court as they are a very large organisation with top lawyers so should we loose their legal fees could be sky high. I can't find an ombudesman/organisation that could take this matter on for us. We have of course written to the brockerage concerned with our feelings but all they would offer us help should we wish to buy another boat from them, which frankly is a joke! Help please.
I started in a new post as a civil service field interviewer for the Office for National statistics 2 months ago.The post is home based, travelling to designated addresses within your designated catchment area. The vacancy I applied for and for which I was accepted was advertised as being for the catchment area of Conwy in North Wales around 40 miles from our home . I applied for the role expecting that the mileage expenses would compensate for a low basic salary. After appointment however I was told by my new line manager that my area would be closer to home essentially to avoid expense remuneration by the civil service.
I feel that the vacancy was in this case a misrepresentation under the act of 1967 in terms of the role location, whether willful or unintentional on the part of the civil service and would be interested in your opinion as to whether.
Many thanks
Kevin
I have a string of emails with a gym membership salesman where because I missed a promotion (due to the gym’s system being down) I asked if they would still honour it. I have in writing the salesman saying “pop in and we’ll sort something”
He then verbally confirmed that he would honour the promotion but this hasn’t happened.
He’s since ignored my contact and the manager of the gym is going to ask me to prove he said this.
We booked our Mexican wedding at the travel agents as the coordinator gave us a price with a wedding which was £769 but she said would be free if we booked 5 rooms, we knew this would happen as had friends and family coming and as she stated we had already booked 5 rooms.
We later found out that we had to pay for extras which we didn't realise were not Included, such as the chuppa and aisle runner for the beach. We emailed asking the cost to upgrade to a higher package, the assistant manager emailed back saying she checked this and the price would be £800 on top of what we were already paying. I asked to confirm whether this meant after taking off the £769 for the original package or on top of and she confirmed this.
Later we received our final invoice with no discount for the £769 for having 5 rooms. I questioned this and they are denying it saying that there is a free package but this is £769.
I have the email from the assistant manager and notes which I wrote down in full view of the agent where she gave me prices and I wrote them down before and after booking 5 rooms.
Would the email be sufficient evidence to prove misrepresentation?
Is this fraudulent misrepresentation?
Thanks
A
If so....does it start from the beginning? As in our move to his home or only after he broke the engagement and threw us out?
Regards A J Lawton
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