D was to sell X a car, for which X would pay the deposit and P would pay the balance. X was to repay P through instalments, but defaulted and wrongfully sold the car. After suing X, P sued D for damages due to a misrepresentation D had made as to the price, which had caused P to suffer loss via the arrangement it had had with X. CA awarded P damages of the amount P paid to D minus the amount X paid to P.
Balcombe LJ: There was a debate as to whether The Misrepresentation Act s.2(1) would give rise to tortious damages (i.e. the position P would be in if the misrepresentation had never been made) or the contractual one (i.e. the position P would be in if the misrepresentation had been true). The answer is the tortious measure of damages. It is also inferred from the section that it is the fraudulent tortious measure rather than the negligent tortious measure. This matters since it means that claims brought under the act are not subject to reasonable foreseeability etc. Regardless of the fact that it is harsh to employ a “fiction of fraud” (i.e. to treat innocent people as fraudsters) this is the plain intention of the act.