Scribd
Upload
20 views

Legal Environment of Business BUS 7305

The document discusses the law of contract and types of misrepresentation in business law. It covers topics like negligent misrepresentation, innocent misrepresentation, and fraudulent misrepresentation. It also discusses cases related to these topics and exceptions to misrepresentation.

Uploaded by

sattom halder
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
20 views

Legal Environment of Business BUS 7305

The document discusses the law of contract and types of misrepresentation in business law. It covers topics like negligent misrepresentation, innocent misrepresentation, and fraudulent misrepresentation. It also discusses cases related to these topics and exceptions to misrepresentation.

Uploaded by

sattom halder
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 20

Legal Environment of Business

BUS 7305

Law of Contract
Law of Contract
To be continued from previous lecture…
* Mere puff:
Statement regarding land fertile and improbable is not
meant misrepresentation.
Case: Dimmock vs. Hallett
Fact:
Held:
To be continued…
* Opinion / belief:
Sheep farming – New Zealand- carry 2000 sheep
is not misrepresentation.
Case: Bisset vs. Wilkinson
Fact:
Held:
To be continued…
However, there is an exception.
Case: Esso Petroleum case.
Fact:
Held:
To be continued…

Also, Lord Justice stated that


where both to a contracting party know equally a fact
does not mean existing fact, and will not amount to be a
misrepresentation but will be a mere opinion.
Case: Smith vs. Land and House Property Corp.
To be continued…
* Statement of intention / promise:
Someone failed to carry out his stated intention does not
make misrepresentation.
Case: Wales vs. Wadham.
To be continued…
Misled:
a) Misleading by representor to representee by direct
communication is a best and obvious method.
b) Represntor made a statement to a third party intention
to communicate such a statement to representee is
called indirect or oblique misled.
Case: Commercial Banking Co. of Sydney 1972.
To be continued…
Inducement:
The misrepresentation must be material.
Case: Mathias vs. Yetts.
Nevertheless, modern court does not distinguish between
materiality and inducement.
The orthodox interpretation of material misrepresentation
is satisfying the objective test.
Case: Muse Prime Properties Ltd. Vs. Adhill Properties
Ltd 1991.
To be continued…

It’s mean whether a reasonable person induced


by the said statement or not.
The onus of proof placed on the representor that
representee does not rely on the said
statement.
To be continued…
On the other hand,
whereby the said statement a reasonable person has no
reason to enter into a contract (but representee entered
into the contract) in that case burden has to sift to the
representee.
To be continued…
Following three cases/situations, a claimant/representee
could not claim that he was induced by another:
1st: where claimant unaware of existing representation.
Case: Horsfall vs. Thomas;
2nd: where claimant know that the representation was
untrue;
3rd: where claimant did not allow the representation to
affect the judgment {where he relies on his own
judgment.
Case: Smith vs. Chadwich.
To be continued…

Types of Misrepresentation:
There are two types of misrepresentation as per s. 18 of the
Contract Act, 1872.
(1) Negligence Misrepresentation at common law; and
(2) Innocent Misrepresentation.
To be continued…
(1) Negligence Misrepresentation at common law:
A statement made without reasonable grounds for
believing it to be true is a negligence misrepresentation
at common law.
Case: Howard Marine & Dredging Co. Ltd. Vs. A. Ogden &
Sons Ltd- 1978.
To be continued…
(2) Innocent misrepresentation:
Neither fraudulent nor negligence. It will be discussed in
details with examples.
To be continued…
In English law misrepresentation is 4 types:
1) Fraudulent misrepresentation:
A statement would be fraudulent where a statement
made
(i) knowingly;
(ii) without a belief that it is truth;
(iii) recklessly, carelessly whether it be true or false.
It most similar to Fraud defined u/s. 17 of the Contract
Act, 1872.
To be continued…
2) Negligence Misrepresentation at common law:
A statement made without reasonable grounds for
believing it to be true.
Case: Howard Marine & Dredging Co. Ltd. Vs. A. Ogden &
Sons Ltd- 1978.
To be continued…
3) Negligent Misrepresentation U/S: 2(1) of Misrepresentation Act,
1967:
Where claimant entered into a contract (misreped by other) and
suffered loss, misrepresentor liable for damage- notwithstanding
misrepresentation was not made fraudulent and can showing
reasonable grounds that the statement was true. And

4) Innocent misrepresentation:
Neither fraudulent nor negligence.
To be continued…
Note:
** Statement made an intention that –representee rely upon =
Liability likely be imposed.
Cace: Smith vs. Eric S Bush
** Statement is put into general public circulation, social occasion
–in that case, if representee relies upon = Liability imposed on
representor in tough.
Case: Chaudhry vs. Prabhakar.
To be continued…

** Statement is put into general public circulation, ‘commercial


context’ and representee rely on such statement is reasonable.
Case: Smith vs. Eric S Bush.

** Statement is put into general public circulation with no


particular person in mind to a recipient- liability many not imposed.
Case: Caparo vs. Dickman.
To be continued…

To be open-ended discussion…

You might also like