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 for Shahida.

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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could be rescinded.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 the claimant.

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.