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Law Notes Contract Law Notes

Misrepresentation Pq Notes Notes

Updated Misrepresentation Pq Notes Notes

Contract Law Notes

Contract Law

Approximately 1511 pages

Contract law notes fully updated for recent exams at Oxford and Cambridge. These notes cover all the LLB contract law cases and so are perfect for anyone doing an LLB in the UK or a great supplement for those doing LLBs abroad, whether that be in Ireland, Hong Kong or Malaysia (University of London).

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This section deals with statements made in negotiations, namely misrepresentations, and mistakes (though non-disclosure may also give rise to liability).

PQ approach in summary

EXAM TIP: Separate between different statements. Do not oscillate between different statements.

STEP 1: Determine if statement is a term of contract. If yes, has contract been breached. If no, move to step 2.

STEP 2: Is statement a collateral warranty? If yes, has it been breached? If not move to step 3.

STEP 3: statement is a representation. Is it a misrepresentation? If no, stop here. If yes, move to step 4.

STEP 4: has liability been excluded/limited successfully? If yes, stop here. If not, move to step 5.

STEP 5: what remedies are available?

1 Is it a term of the contract?

NB. If there is an entire agreement clause on the facts, the representation is likely not a term of the contract.

If the representation is also incorporated as a term of the contract, the representor is liable, and the innocent party has remedies, for both misrepresentation and breach of contract. s 1, Misrepresentation Act 1967: “Where a person has entered into a contract after a misrepresentation has been made to him, and – (a) the misrepresentation has become a term of the contract; or (b) the contract has been performed; or both, then, if otherwise he would be entitled to rescind the contract without alleging fraud, he shall be so entitled, subject to the provisions of this Act, notwithstanding the matters in paragraphs (a) and (b) in this section.”

However, remedies cannot be simultaneously asserted if mutually inconsistent, for e.g. rescission for misrepresentation and damages for breach of contract.

2 If not, is it a mere representation, or a collateral warranty?

Esso v Mardon: a collateral warranty arises where there is (1) an intention on behalf of both parties for the promise to become a collateral contract, (2) consideration – which is the reliance on the promise by the representee to enter the main contract. Hence, representee can sue for breach of the promise.

NB. If there is a clause which says “no pre-contractual assurance is a warranty”, no collateral warranty will arise in PQ.

2 If representation, is it a misrepresentation?

Mere “puffs”

A misrepresentation cannot be a mere “puff”.

What are mere puffs? Apply cases analogously

  • Dimmock v Hallett: An auction catalogue made several statements about the land, one of which being that it was “fertile and improvable”. Held, no misrepresentation. This was a mere general statement…a mere flourishing description by an auctioneer.

  • However, if the statement is sufficiently specific it will not be a mere puff. This depends on the facts. Carlill v Carbolic Smoke Ball: D made the following advertisement, “that “100l. reward will be paid by the Carbolic Smoke Ball Company to any person who contracts the iufluenza after having used the ball three times daily for two weeks according to the printed directions supplied with each ball”, “1000l is deposited with the Alliance Bank, shewing our sincerity in the matter”. Held, no mere puff. Intended to be a promise. Fact that money had been deposited and sincerity shown was proof that not a mere puff.

PQ approach: depends on the facts. For e.g., in the PQs, if D makes an exaggerated statement, that’s a mere puff.


Definition: A material false representation of fact or law, addressed to the claimant, which induced her entry into the contract.

  1. A representation may arise by words or conduct

Representation can be by conduct (Spice Girls v Aprilia).

Where conduct comprises a series of representations, they must be looked at in totality: in sum, does the conduct, as a whole, give rise to a representation? Spice Girls v Aprilia World Service: “Whilst it is necessary to give each episode separate consideration it is also necessary to have regard to their cumulative effect. This is not a case of an isolated representation made at an early stage of ongoing negotiations. It is the case of a series of continuing representations made throughout the two months' negotiations leading to the Agreement. Later representations gave added force to the earlier ones; earlier representations gave focus to the later ones”.

Can a representation arise by non-disclosure?

If the non-disclosure is a pure non-disclosure, the general rule is caveat emptor Robbins v Jones.

But non-disclosure may sometimes give rise to misrepresentation if it occurs in the following circumstances.

  • In the context of an express statement. Cassa di Risparmio v Barclays Bank: (1) “Silence by itself cannot found a claim in misrepresentation.” (2) “But an express statement may impliedly represent something. For example, a statement which is literally true may nevertheless involve a misrepresentation because of matters which the representor omits to mention.”

  • In the context of continuing conduct. Spice Girls Ltd v Aprilla World Service: A party’s misleading conduct can constitute a misrepresentation, even in the absence of an express statement. On the facts, the Spice Girls’ preservation of an appearance of unity by participating in photo shoots, despite knowing that one of their number would be leaving the band quite soon, was a misrepresentation that the band was not about to change its membership in this way.

  • In the context of conduct. Gordon v Selico: A vendor’s decision to cover up dry rot in a property in order to conceal this problem from prospective purchasers and their surveyors was a misrepresentation by conduct.

After that, same rules apply: must be materially false, addressed to C, induces C to enter contract.

  1. Addressed to the claimant

  2. Representation must be about a fact or law

Statements of law which are false can be misrepresentations: Brennan v Bolt Burdon

A statement of one’s intention is a statement of fact, since the state of one’s intention is a fact: Edgington v Fitzmaurice.

Cf. Kleinwort v Malaysia Mining (1989): There was...

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