Representation: pre contractual statement which do not form part of contract.
Knowledge of statement
Dick Bentley v Harold:
The statement was a term. Mr Smith as a car dealer had greater expertise and the claimant relied upon that expertise.
Importance of the statement
Bannerman v white
The statement that the hops had not been treated with sulphur was a term of the contract rather than a representation as the claimant had communicated the importance of the term and relied on the statement. His action for breach of contract was successful.
Responsibility of statement
Shawel v reade
The statement was a contractual term. The defendant had assured him he could rely on his word and the claimant had communicated the purpose for which the horse was to be used. The defendant was thus in breach of contract.
Verification of statement
Ecay v Gradefory
The statement that the boat was sound was merely a representation. The statement was not sufÏciently emphatic to amount to a term and the advice to have the boat surveyed demonstrated the defendant did not wish the claimant to rely on the statement.
Lapse of time
Routledge v Mckay
The statement was a representation and not a contractual term. There was a lapse of time between the making of the statement and entering the contract giving the claimant the opportunity to check the statement. Furthermore there was no mention of the date in the written agreement and the words of the agreement stating the transaction is considered closed excluded any possible collateral warranty.
IS THE STATEMENT AN ACTIONABLE MISREPRESENTATION?
· Misrepresentation:
“is an unambiguous false statement of fact or law, made during negotiations by one party to another and induces the other to enter into contract.”
Unambiguous:
· If a party is to prove they have an actionable claim it must be that the term is sufficiently clear. · Dimmock v Hallett, the court held the statement was a mere puff. Mere puffs have no legal authority. Statement made by the seller was partially correct but he failed to mention about the property being vacated. (Exaggerated vague statement)
False Statement of Fact:
Where a statement, which was true when made, becomes false as a result of a change of circumstances, keeping silent may be treated as a misrepresentation.
There are some contracts which are treated as being ‘of the utmost good faith’ (or uberrimaefidei). This means that parties are obliged to disclose relevant information, even if it is not askedfor. The most common example of this type of contract is a contract of insurance.